You purchase an ibm call contract at 120 for a premium of 5, Finance Basics

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You purchase an ibm call contract at 120 for a premium of 5

Question: A) You purchase an IBM call contract at $120 for a premium of $5. You hold the option until expiration, when share price is $123. What is the payout and the profit? Please plot a graph.

B) You write an IBM call contract at $120 for a premium of $4. You hold the option until expiration, when share price is $121. What is the payout and the profit? Please plot a graph.

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Finance Basics: You purchase an ibm call contract at 120 for a premium of 5

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Finance Basics: You purchase an ibm call contract at 120 for a premium of 5

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