Suppose you purchase a call contract on a T-bond with an exercise price of 102 16/32 . The bond represents $100,000 of bond principal, and has a premium of $1,000.
a) If the actual T-bond price falls to 100, what is the gain/loss per contract on the position?
b) If the actual T-bond price rises to 103, what is the gain/loss per contract on the position?