You sold (wrote) three TXA call option contracts with a strike price of $35 when the option was quoted at $2.60. The option expires today when the value of TXA stock is $33.70. Ignoring trading costs and taxes, what is your total profit or loss on your investment?
A) $0
B) $260
C) $390
D) $780
E) $1,170

Question

Quizplus · Accepted Answer

Since the stock price is below the strike price at expiration, the options expire worthless. You keep the premium received from selling the options: 3 contracts * 100 shares/contract * $2.60 = $780.

You Sold (Wrote) Three TXA Call Option Contracts with a Strike