What is the time premium amount for the following contract 1 ABC Jan 45 call $4 ABC market price $49?

Options

The holder of a call on a listed stock exercises. At assignment, the holder must:

An investor purchases 1 ABC Jan 45 Call @ $3. The investor subsequently exercises his option contract. The holder has the right to:

buy stock at $45 per share

The writer of a call on a listed stock is exercised. The writer must:

Equity options contracts for a given month expire on the:

third Friday of the month at 11:59 PM Eastern Standard Time

If the writer of an equity put contract is exercised, the writer must deliver:

If the writer of a call contract is assigned, the call writer must:

deliver the security in 2 business days

A customer would sell put contracts because the customer:

is bullish on the underlying security

To receive a dividend, the holder of a call contract may exercise the contract on all of the following days:

two business days prior to record date
two business days prior to ex date
one business day prior to ex date
EXCEPT: one business day prior to record date

the price of the contract

A customer owns an ABC Call option. ABC declares a dividend for shareholders on record July 17th. The last day to exercise the option and get the dividend is:

ABC Jan 50 call contracts are trading in the market at .15. What is the dollar price that a customer would pay for 2 contracts at this price?

$30.00
A premium of .15 is $.15 per share. Equity contracts cover 100 shares, so the total premium is $.15 x 100 = $15.00 per contract. Since there are two contracts, the total premium would be $30.

A customer owns an ABC Call option. ABC declares a dividend for shareholders on record July 5th. The last day to exercise the option and get the dividend is:

If the market price is above the strike price on a call contract, the difference is termed the:

A customer owns an ABC Call option. ABC declares a dividend for shareholders on record July 10th. The last day to exercise the option and get the dividend is:

The following contract is "in the money" by how much?
1 ABC Jan 45 Call @ $5
ABC Market Price = $49

$4
Intrinsic value is the amount by which an option contract is "in the money" - it has nothing to do with the premium. It is the difference between the strike price and market price, if exercise is profitable to the holder. In this case, the holder of th

A customer owns an ABC Call option. ABC declares a dividend for shareholders on record July 23rd. The last day to exercise the option and get the dividend is:

If the market price is above the strike price on a put contract, the difference is termed the:

A customer owns 100 shares of ABC stock and owns 1 ABC Put option. The customer wishes to sell the stock by exercising the put, but wishes to retain a recently declared cash dividend. In order to receive the dividend, the customer must exercise the put:

A client buys an ABC Jul 50 Call @$2 when the stock is trading at $55. The contract:

has 5 points of intrinsic value

A customer owns 100 shares of ABC stock and owns 1 ABC Put option. The customer wishes to sell the stock by exercising the put, but wishes to retain a recently declared cash dividend. In order to receive the dividend, the customer could NOT exercise the p

What is the "out the money" amount for the following contract?
1 ABC Jan 30 Call @ $5
ABC Market Price = $26

4
An option contract is "out the money" if exercise would be unprofitable to the holder, ignoring any premiums paid. Such a contract would be allowed to expire unexercised. In this case, the holder of the call can buy the stock at the strike price of $30

A customer owns 100 shares of ABC stock and owns 1 ABC Put option. The customer wishes to sell the stock by exercising the put, but wishes to retain a recently declared cash dividend. In order to receive the dividend, the customer must exercise the put:

Which statement is TRUE about option contracts?

Long puts go "out the money" when the market price rises above the strike price

The seller of an XYZ Mar 60 call is covered by all of the following

long 100 shares of XYZ stock
long 1 XYZ Apr 50 Call
long an escrow receipt for 100 shares of XYZ stock
EXCEPT: long 1 XYZ Feb 40 Call

The purchase of a call has what advantage over buying the underlying security?

Lower capital requirement

All of the following statements about index option contracts are true:

they are standardized contracts issued by the OCC
they are listed on exchanges and trade
they typically have a higher notional value than stock option contracts
EXCEPT: they cannot be exercised - they can only be closed by trading

The purchase of a put has all of the following advantages over selling a security short:

No requirement to make up dividend payments on the borrowed shares
Lower capital requirement
Less potential risk
EXCEPT: No loss of time value as the position is held

A customer has a broadly diversified stock portfolio with a current market value of $2,500,000. The customer wishes to hedge the portfolio against a market decline. The customer should:

The main advantage of buying a call option as opposed to buying the underlying stock is:

lower capital requirement

Which is the TRUE statement about listed options contracts?

Stock option contracts are issued American style while most index option contracts are issued European style

All of the following are advantages of buying a put as compared to selling short stock:

no requirement to borrow shares
lower capital requirement
no requirement to pay interest on a stock loan
EXCEPT: no loss of time premium as the position is held

Generally, index options can be:

traded at any time, but can only be exercised at expiration

A customer is long an ABC Jan 60 Call. The position has a profit that the customer wishes to capture. The proper order to enter is a(n):

Other than the OEX, virtually all index options are issued as:

Which options strategy provides the greatest profit potential in a bull market?

If an individual is extremely bearish on the market, which strategy is appropriate?

A customer buys 1 ABC Feb 45 Call @ $3 when the market price of ABC is 44. The stock moves to $54 and the customer exercises. The gain or loss to the customer is:

$600 gain
The holder has bought the right to buy the stock at $45 per share. She bought this right at a premium of $3 per share. By exercising, the customer buys the stock at the strike price of $45 and then sells the stock at the prevailing market price

If the Standard and Poor's 500 Index is falling rapidly, it would be expected that the value of the VIX would:

A customer buys 1 ABC Feb 50 Call @ $7 when the market price of ABC is 52. If the market value of ABC falls to $48 and stays there through February, the customer will:

lose $700
If the market falls to $48, the 50 call expires out the money and the holder loses the $700 premium paid.

Which statement is FALSE about the VIX option?

VIX valuation moves in parallel with movements of the Standard and Poor's 500 Index

A customer buys 2 ABC Jan 40 Calls @ $5 when the market price of ABC is at $39. The breakeven point is:

$45
Long Call Breakeven = Strike Price + Premium

Which statement is TRUE about the VIX option?

The VIX option is traded on the CBOE
VIX values are based on the implied volatility of the Standard and Poor's 500 Index
Exercise settlement of the VIX is European style

The exercise of an SPX (S&P 500 Index) option will result in the delivery of:

cash the next business day

In November, a customer buys 1 ABC Jan 70 Call @ $4 when the market price of ABC is 71. The customer's maximum potential gain is:
A customer buys 10 ABC Jan 50 Calls @ 4.75 when the market price of ABC is $51 per share. The maximum gain potential is:
In N

unlimited
The holder of a call has unlimited gain potential. He or she has the right to buy stock at a fixed price - and the stock can rise an unlimited amount.

Settlement of an SPX (S&P 500 index) option exercise will be made by the delivery of:

A customer buys 10 ABC Jan 50 Calls @ 4.75 when the market price of ABC is $51 per share. The maximum loss potential is:

$4,750
If the market stays at 50 or falls, the calls will expire worthless and the premium paid is lost. There are 10 contracts so, $4.75 x 10 contracts x 100 shares in each contract gives a total loss of $4,750.

If an SPX options contract is exercised, then the:

writer must deliver cash to the holder the next business day

The maximum gain for the holder of a call is:

Exercise settlement of index options is European Style. This means that:

exercise is only permitted at the expiration date

The sale of a call has all of the same characteristics as selling stock short EXCEPT:

no erosion of value as the position is held

A customer sells 1 ABC Feb 40 Call @ $7 when the market price of ABC is $39. The stock moves to $50 and the customer is assigned. The stock is bought in the market for delivery. The gain or loss to the writer is:

$300 loss
The writer of the call, when exercised, is obligated to deliver stock at $40 per share. He or she must buy the stock at $50 in the market, losing 10 points. Since $700 (7 points) was collected in premiums, the net loss is 3 points or $300.

A customer sells 1 ABC Feb 50 Call @ $7 when the market price of ABC is $52. If the market value of ABC falls to $48 and stays there through February, the customer will:

gain $700
If the market falls to $48, the 50 call expires "out the money" and the writer keeps the $700 premium.

A customer sells 1 ABC Jan 50 Call @ $3 when the market is at $49. The breakeven point is:

$53
Short Call Breakeven = Strike Price + Premium

A customer sells 1 ABC Jan 35 Call @ $2 when the market is at $33. The maximum potential gain is:

A customer sells 1 ABC Feb 50 Call @ $7 when the market price of ABC is 52. The customer's maximum potential loss is:
A customer sells 10 ABC Jan 50 Calls @ 4.75 when the market price of ABC is $51 per share. The maximum loss potential is:

The maximum gain for the writer of a call is:

The purchase of a put is a:

A customer buys 1 ABC Jul 65 Put at $5 when the market price of ABC is 64. ABC stock rises to $70 and stays there through July. The customer:

loses $500
If the market rises to $70, the put expires "out the money" (since the strike price is $65). The customer loses the $500 premium paid.

A customer buys 1 ABC Jul 40 Put at $6 when the market price of ABC is 41. ABC stock falls to $31 and the customer exercises the put and buys the stock at the market to deliver. The customer:

gains $300
If the market falls to $31 and the put is exercised, the customer sells the stock at $40 and can buy that stock for $31, for a $9 point gain. Since $6 was paid in premiums, the net gain is 3 points or $300 for the contract covering 100 shares.

A customer buys 1 ABC Jul 50 Put at $7 when the market price of ABC is $49. The breakeven point is:

A customer buys 2 ABC Jan 15 Puts @ 2 when the market price of ABC is $14. The maximum potential gain is:

$2,600
1500 - 200 (premium) = 1300 x 2 (contracts) = 2600

A customer buys 2 ABC Jan 60 Puts @ $4 when the market price of ABC is $59. The maximum potential loss for the customer is:

$800
400 (premium paid) x 2 (contracts) = 800

The maximum gain for the holder of a put is:

strike price minus premium paid

The sale of a put has all of the same characteristics as buying stock

limited loss potential in a falling market
low liquidity risk if the position is to be liquidated
both are bull market strategies
EXCEPT: unlimited gain potential in a rising market

A customer sells 1 ABC Jul 60 Put at $7 when the market price of ABC is $56. ABC stock rises to $65 and stays there through July. The customer:

A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. ABC stock rises to $60 and stays there through July. The customer:

A customer sells 1 ABC Jul 90 Put at $5 when the market price of ABC is $89. The market falls to $82 and the customer is exercised. The customer then sells the stock in the market. The loss is:

$300
buy stock 90, sell for 82, 5 point gain
-90 + 82 + 5 = -3 or 3 net loss

A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The breakeven point is:

A customer sells 2 ABC Jan 65 Puts @ $3 when the market price of ABC is $66. The maximum potential gain is:

A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The customer's maximum potential gain is:

$600
The maximum gain for the writer of a naked call or put is the premium collected. This happens if the contract expires "out the money.

A customer sells 2 ABC Jan 60 Puts @ $4 when the market price of ABC is $59. The maximum potential loss for the customer is:

$11,200
60 (strike price) + 4 (premiums) = 56 x 200 (shares) = 11200

A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The maximum potential loss to the writer is:

$3,400
-40 + 6 (premium) = 34 net x 100 (shares)

The maximum loss for the writer of a put is:

strike price minus premium received

A customer owning 100 shares of stock could receive protection by:

A customer purchases 100 shares of ABC stock at $34 and buys 1 ABC Jan 30 Put @ $2 on the same day in a cash account. Subsequently, the stock goes to $44 and the customer's put expires and the customer sells the stock in the market at the prevailing marke

$800 gain
price rises to $44 and expires out the money
stock purchased for $34 is sold at $44 for profit of $10 per share
$10 - $2 premium = $8 net profit x 100 shares = $800

A customer buys 100 shares of ABC stock at $58 and buys 1 ABC Jul 55 Put @ $2.50 on the same day. If the stock falls to $50 and the put is exercised, the customer will have a:

$550 loss
lose 3 points (55-58) in addition to 2.50 premium = 5.50 total loss

A customer buys 100 shares of XYZ at $51 and buys 1 XYZ Jan 50 Put @ $5. The breakeven point is:

$56
Long Stock / Long Put Breakeven = Stock Cost + Premium

A customer buys 100 shares of ABC stock at $50 and buys 1 ABC Jan 50 Put @ $5. The maximum potential gain is:

A customer buys 100 shares of ABC stock at $56 and buys 1 ABC Jul 55 Put @ $2.50 on the same day. The maximum potential loss is:

$350
55 - 56 = 1 + 2.50 = 3.50

A customer buys 100 shares of XYZ at $49 and buys 1 XYZ Jan 50 Put @ $5. The maximum potential loss is:

A customer buys 100 shares of ABC stock at $58 and buys 1 ABC Jul 55 Put @ $2.50 on the same day. The maximum potential loss is:

A customer buys 100 shares of XYZ at $51 and buys 1 XYZ Jan 50 Put @ $5. The maximum potential loss is:

A customer buys 100 shares of ABC at $65 and buys 1 ABC Jan 65 Put @ $3. At which market price is the position profitable?

A customer buys 100 shares of ABC at $65 and buys 1 ABC Jan 65 Put @ $3. The position is profitable at all of the following market prices EXCEPT:

$68
profitable at $69 and higher (69, 70, 71)

A customer buys 100 shares of ABC at $50 and buys 1 ABC Jan 50 Put @ $5. This position results in a profit when the price of ABC stock:

A customer buys 100 shares of ABC at $30 and buys 1 ABC Jan 30 Put @ $5. At which market price is the position profitable?

A customer buys 100 shares of ABC at $64 and buys 1 ABC Jan 65 Put @ $3. At which market price is the position profitable?

Which option position is used to hedge a short stock position?

On the same day in a margin account, a customer sells short 100 shares of ABC at $44 and buys 1 ABC Jan 45 Call @ $2.50. If the market price of ABC rises to $50 and the customer exercises the call, the result is a:

A customer sells short 100 ABC at $46 and buys 1 ABC Jan 45 Call @ $3. ABC goes to $30 and the customer lets the call expire and closes out the stock position at the market. The customer has a:

$1,300 gain
.
46 - 30 = 16 pt gain - $3 premium = $13 per share net gain

A customer sells short 100 ABC at $43 and buys 1 ABC Jan 45 Call @ $5. ABC goes to $33 and the customer lets the call expire and closes out the stock position at the market. The customer has a:

$500 gain
43 - 33 = 10
10 - 5 = 5 per share

A customer sells short 100 ABC at $45 and buys 1 ABC Jan 45 Call @ $3. ABC goes to $30 and the customer lets the call expire and closes out the stock position at the market. The customer has a:

A customer sells short 100 shares of PDQ at $58 and buys 1 PDQ Jul 60 Call @ $3. The breakeven point is:

$55
Short Stock / Long Call Breakeven = Short Sale Price - Premium

A customer sells short 100 shares of ABC stock at $40 and buys 1 ABC Mar 40 Call @ $5. The maximum potential gain is:

A customer sells short 100 shares of ABC stock at $41 and buys 1 ABC Mar 40 Call @ $5. The maximum potential gain is:

A customer sells short 100 shares of ABC stock at $52 and buys 1 ABC Mar 55 Call @ $5. The maximum potential gain is:

A customer sells short 100 shares of ABC stock at $38 and buys 1 ABC Mar 40 Call @ $5. The maximum potential gain is:

A customer sells short 100 shares of ABC stock at $38 and buys 1 ABC Mar 40 Call @ $5. The maximum potential loss is:

A customer sells short 100 shares of PDQ at $58 and buys 1 PDQ Jul 60 Call @ $3. The customer's maximum potential loss is:

Which of the following option positions is used to generate additional income against a long stock position?

A customer buys 200 shares of GE at $72 and sells 2 GE 70 Calls @ $6. The market rises to $80 and the calls are exercised. The customer has a(n):

$800 gain
72 - 70 = 200 loss per contract
+ 600 premiums = 400 net gain x 2 contracts = 800

A customer buys 100 shares of ABC stock which is trading at $65. The customer thinks the market will remain at $65 in the following months, so he decides to sell 1 ABC Sept 65 Call @ $3. ABC then goes to $60 and the customer's call contract expires and th

$200 loss
bought at 65, sold at 60 = 5 loss
+ 3 premiums = 2 net loss

A customer buys 100 shares of ABC stock at $49 and sells 1 ABC Jan 50 Call @ $4. The breakeven point is:

A customer buys 200 shares of ABC at $68 and sells 2 ABC Jan 70 Calls @ $3. The maximum potential gain is:

A customer buys 100 shares of ABC stock at $49 and sells 1 ABC Jan 50 Call @ $4. The maximum potential loss is:

A customer buys 100 shares of ABC stock at $39 and sells 1 ABC Jan 45 Call @ $2 on the same day in a cash account. The customer's maximum potential loss is:

To generate additional income in a stable market, a customer who is long stock could:

What will cover the sale of 1 ABC Jan 50 Put?

Short 100 shares of ABC stock @ $50

Which of the following option positions is used to generate additional income against a short stock position?

A customer sells short 100 shares of DEF stock at $63 and sells 1 DEF Oct 60 Put @ $6. The market rises to $68 and the put expires. The customer buys the stock in the market covering her short stock position. The gain or loss is:

A customer sells short 100 shares of ABC stock at $96 per share. The stock falls to $83, at which point the customer writes 1 ABC Sept 80 Put at $1. The stock falls to $74 and the put is exercised. The customer has a gain per share of:

A customer sells short 100 shares of PDQ at $49 and sells 1 PDQ Sep 50 Put @ $6. The breakeven point is:

A customer sells short 100 shares of PDQ at $49 and sells 1 PDQ Sep 50 Put @ $6. The maximum potential gain while both positions are in place is:

What is the maximum potential loss for a customer who is short 100 shares of ABC stock at $33 and short 1 ABC Jan 35 Put at $6?

A customer sells short 500 shares of XYZ stock at $69 and sells 5 XYZ Jan70 Puts @ $3. The maximum loss potential is:

A customer sells short 100 shares of PDQ at $49 and sells 1 PDQ Sep 50 Put @ $6. The customer will have a loss at which of the following market prices for PDQ?

The Options Clearing Corporation is responsible for all of the following:

standardization of listed options contracts
issuance of listed options contracts
assignment of exercises of listed options contracts
EXCEPT: trading of listed options contracts

The issuer of listed options contracts is the:

Options Clearing Corporation

All of the following are standardized for listed option contracts:

strike price
contract size
expiration
EXCEPT: premium

The January stock option contracts of a company assigned to Cycle 3 have just expired. Which contracts will commence trading on the CBOE?

The December stock option contracts of a company assigned to Cycle 2 have just expired. Which contracts will commence trading on the CBOE?

The November stock option contracts of a company assigned to Cycle 1 have just expired. Which contracts will commence trading on the CBOE?

Regular stock option contracts can be purchased with all of the following lives:

3 months
6 months
9 months
EXCEPT: 12 months

O.C.C. rules limit the maximum "legal" life of an equity option contract to:

The owner of an American style option can exercise the contract:

at any time, up to and including, the expiration date

Regular way trades of all of the following securities settle next business day EXCEPT:

The last time to trade expiring equity options is:

4:00 PM Eastern Standard Time; 3:00 PM Central Time; on the expiration day
4:00 PM EST on the third Friday of the month

Out the money" is defined as the:

difference between the strike price and market price of the underlying security, if exercise is unprofitable to the holder

A customer sells short 100 shares of ABC stock at $40 and buys 1 ABC Mar 40 Call @ $5. The maximum potential loss is:

$500
- only loss is the premium paid
- stock was sold at $40 and can be bought back at $40 by exercising the call

The maximum loss for the holder of a call is:

A customer buys 2 ABC Jan 60 Puts @ $4 when the market price of ABC is $59. The breakeven point is:

$56
$60 - $4 = $56
long put breakeven is strike price - premium

A customer sells 1 ABC Feb 40 Call @ $2 when the market price of ABC is $39.50. The customer's maximum potential loss is:

A customer buys 100 shares of ABC stock at $58 and buys 1 ABC Jul 55 Put @ $2.50 on the same day. The breakeven point is:

A customer sells short 100 shares of ABC stock at $66 and sells 1 ABC Jan 65 Put @ $4. What is the breakeven point?

70
$66 + $4 = 70
this is a covered put writer, used for a flat market

After exercising an equity options contract, the trade settles:

2 business days after trade date

Selling a put against a stock position sold short is a suitable strategy when the market is expected to:

What investment strategy would be used by a conservative stock investor seeking income?

The sale of a call on stock owned

A customer buys 100 shares of ABC stock at $40 and sells 1 ABC Jan 45 Call @ $2 on the same day in a cash account. The customer's maximum potential gain until the option expires is:

$700
customer must deliver the stock he bought at -40 for +45 strike price = +5 gain
+2 collected in premiums = +7

Which options strategy provides a gain equal to the premium in a bull market?

A customer sells short 100 shares of ABC stock at $60 and sells 1 ABC Oct 60 Put @ $6. The maximum potential loss is:

A customer purchases 100 shares of ABC stock at $44 and buys 1 ABC Jan 45 Put @ $7. Subsequently, the stock goes down to 35 and the customer exercises the put, selling his stock. The customer has a:

$600 loss
sell the stock for +$45, bought for -$44 = +$1 gain
but paid -$7 for the right to sell = -$6 point loss

Which option position is used to hedge a long stock position?

A customer buys 100 shares of ABC stock at $58 and buys 1 ABC Jul 55 Put @ $2.50 on the same day. The maximum potential gain is:

The last time to trade an equity option that is about to expire is:

3:00 PM Central Time; 4:00 PM Eastern Time; on the 3rd Friday of the expiration month

A customer buys 1 ABC Jan 35 Call @ $3 when the market price of ABC is at $34. ABC goes to $42 and the customer exercises the call and sells the stock at the market. The customer has a:

$400 gain
7 point gain but $3 paid in premiums

The maximum "legal" life on a regular stock option contract is:

A customer buys 1 ABC Jul 40 Put at $6 when the market price of ABC is 38. The maximum potential loss to the holder is:

$600
- when the market price > strike price, maximum loss is the premium paid

An American Style stock option differs from a European style stock options because it can be:

exercised anytime until expiration

In November, a customer sells 1 ABC Jan 45 Call @ $3 when the market price of ABC is $44. If ABC rises to $48 and the writer is assigned, the customer will:

breakeven
buy at -48, deliver at +45, for a -3 loss which is offset by the +3 premium

A customer who is short stock will buy a call to:

protect the short stock position from a rising market

A customer buys 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The customer's maximum potential gain is:

What is the "in the money" amount for the following contract?
1 ABC Jan 45 Call @ $4
ABC Market Price = $49

4
buy the stock at $45 when market price is $49 = $4 profit to the holder

A customer buys 100 shares of ABC stock which is trading at $55. Subsequently, the market moves to $60. The customer thinks the market will remain at $60 in the following months, so he sells 1 ABC Sept 60 Call @ $3. ABC then goes to $58 and the customer's

$600 gain
buy for -$55, sell for +$58 = $3 gain
sell the call at $3
total gain is 6

Which of the following is NOT standardized for listed option contracts?

Commissions and exercise Costs

Covered call writing is an appropriate strategy in a:

If an equity call holder exercises a contract, the holder must deliver:

An inverse ETF is most similar to taking what options position(s) on the reference index?

On the same day in a margin account, a customer sells short 100 shares of ABC at $44 and buys 1 ABC Jan 45 Call @ $2.50. The customer will break even at:

$41.50 per share
sold the stock for +44, paid -2.50 for the call = net sale is 41.50

If an equity put writer is exercised, the writer has the obligation to:

buy stock in 2 business days at the strike price

A customer sells 1 ABC Jul 45 Put at $5 when the market price of ABC is $43. ABC stock rises to $53 and stays there through July. The customer:

gains $500
if the market rises to $53 the put expires out the money (since strike price is $45) and the writer keeps the premium

On the same day in a cash account, a customer buys 100 shares of PDQ stock at $49 and sells 1 PDQ Jan 50 Call @ $2. The stock rises to $60 and the call is exercised. The customer has a(n):

$300 profit
writer receives +$2 per share for selling the call
if the short is exercised, the stock is delivered for 50-49= +$1 gain per share
total gain is +3

The most efficient way for a client to hedge a broadly diversified $2,500,000 stock portfolio is to:

A customer buys 200 shares of GE at $72 and sells 2 GE Feb 70 Calls @ $6. The breakeven point is:

A customer sells short 100 shares of ABC at $54 and buys 1 ABC Jan 55 Call @ $6. ABC goes to $79 and the customer exercises the call to cover her short stock position. The customer has a:

$700 loss
sell stock for +54, buy it for -55 = -1 loss +-6 premiums = total -7

A customer buys 100 shares of XYZ stock at $72.25 and buys 1 XYZ Oct 70 Put @ $.50 on the same day in a cash account. The stock rises to $75.38. The put expires and the customer sells the stock in the market at the current price. The customer has a:

$263 gain
customer buys the put and the stock for 72.25 + .50 = 72.75 per share
stock price rises to 75.38 so the put expires out the money
customer sells the stock in the market for 75.38 - 72.75 = +$2.63 or 263

ABC Jan 50 call contracts are trading in the market at 3.40. What is the dollar price that a customer would pay for 2 contracts at this price?

$680.00
premium is 3.40 per share, equity contracts have over 100 shares so the total premium is $340
two contracts so total premium is $680

In January, a customer buys 1 ABC Jun 80 Call @ $7 when the market price of ABC is 81. The customer's maximum potential gain is:

What is the time premium amount of the following contract?

What is a time premium?

Which of the following contracts has the greatest intrinsic value ABC Jan 50 call when the market price of ABC stock is $55?

What is the maximum potential loss for a customer who is short 100 shares of ABC stock at $39 and short 1 ABC Jan 35 put at $6?