Question

In: Finance

You purchased a call option on IBM stock 3 months ago for a price (premium) of $1.

You purchased a call option on IBM stock 3 months ago for a price (premium) of $1. The option has a 6-month expiration and a strike price of $146. You decided to exercise the option today when IBM stock is trading at $147. This means that _________________



You sold an IBM stock today for $1.



You bought an IBM stock today for $146.



You bought an IBM stock today for $147.



You sold an IBM stock today for $146.

Solutions

Expert Solution

Call option gives right to purchase at strike price

Here strike price = 146

This means that : You bought an IBM stock today for $146

Answer : You bought an IBM stock today for $146


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