JBLU is trading at $22/share. The AUG Call X = 20 is trading at $3.25. Answer the following:
a) What is the time value of this option?
b) What is the intrinsic value of this option?
c) Maximum loss to the holder?
d) Maximum loss to the writer?
e) If you write 1 call option on JBLU AUG Call X = 20 for $2.25. At expiration, the stock is trading at $27 and you are exercised. What is your gain or loss? What if the stock rises to $30/share. What is your gain or loss?