. ESS is currently trading at $235/share. You bought 200 shares of ESS and sold 2...

. ESS is currently trading at $235/share. You bought 200 shares of ESS and sold 2 CALL-option contracts on ESS with a strike price of $230 for $15 each.

a. What will be your total $ and % gain/loss if ESS price is $250 at the expiration date?

b. What will be your total $ and % gain/loss if ESS price is $230 at the expiration date?

c. What will be your total $ and % gain/loss if ESS price is $220 at the expiration date?

Expert Solution

ans

Particulars	250	220	230
Expiration price	250	220	230
Strike price	230	230	230
Option status	Exercise	Lapse	Lapse
Payoff on option	(20)	-	-
Return on stock	15	(5)	(15)
$ return on investment per share	(5)	(5)	(15)
/ Net investment	220	220	220
return on investment(%)	-2.27%	-6.82%	-2.27%
Total return	(15)	(45)	(15)

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jeff jeffy answered 2 years ago

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