There's a call option contract of GM stock for $85.00 a contract, prior to the third Friday of October 2021 (the exp date): The option writer: O will sell 100 shares of GM for $85.00 on the third Friday of October 2021 regardless of the market price of GM. O has the right but is not required to sell 100 shares per contract of GM to the option holder should the option holder exercise O has the option but not the requirement of selling 100 shares of GM for $85.00. O is required to sell 100 shares per contract of GM to the option holder should the option holder exercise the option.
There's a call option contract of GM stock for $85.00 a contract, prior to the third Friday of October 2021 (the exp date): The option writer: O will sell 100 shares of GM for $85.00 on the third Friday of October 2021 regardless of the market price of GM. O has the right but is not required to sell 100 shares per contract of GM to the option holder should the option holder exercise O has the option but not the requirement of selling 100 shares of GM for $85.00. O is required to sell 100 shares per contract of GM to the option holder should the option holder exercise the option.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:There's a call option contract of GM stock for $85.00 a contract, prior to the third Friday of October 2021 (the exp
date): The option writer:
O will sell 100 shares of GM for $85.00 on the third Friday of October 2021 regardless of the market price of GM.
O has the right but is not required to sell 100 shares per contract of GM to the option holder should the option holder exercise
O has the option but not the requirement of selling 100 shares of GM for $85.00.
O is required to sell 100 shares per contract of GM to the option holder should the option holder exercise the option.
Transcribed Image Text:85.00 a contract, prior to the third Friday of October 2021 (the expiration
Friday of October 2021 regardless of the market price of GM.
s per contract of GM to the option holder should the option holder exercise the option.
100 shares of GM for $85.00.
I to the option holder should the option holder exercise the option.
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