At what point is the payoff from owning a call option on a stock greater than the payoff from owning the stock itself?
A) When stock price exceeds strike price at expiration
B) When strike price exceeds stock price at expiration
C) When stock price equals strike price at expiration
D)Call payoff never exceeds stock payoff.

Question

Quizplus · Accepted Answer

The payoff from owning a call option is the stock price minus the strike price, but only if the stock price exceeds the strike price. However, owning the stock itself provides a payoff equal to the stock price, which will always be greater than or equal to the payoff from the call option.

At What Point Is the Payoff from Owning a Call