Katie purchased 4 call options on Atlas Co. stock with a strike price of $37.00. On the expiration date, the stock was priced at $36.95 a share. What is the total payoff on the option contracts?
A) -$220
B) -$55
C) $0
D) $2.20
E) $55

Question

Quizplus · Accepted Answer

The payoff on a call option is the maximum of zero or the stock price minus the strike price. Since the stock price ($36.95) is less than the strike price ($37.00), the payoff is $0.

Katie Purchased 4 Call Options on Atlas Co