Call option contract, A trader buys a 3-month call option

Call option contract

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Reference no: EM13978884

A trader buys a 3-month call option contract on 100 shares of a stock with strike price $40. Which of the following statement is correct if the options are held until the end?

a. If the stock price is $42 at the end, the trader exercises his options

b. If the stock price is $38 at the end, the trader exercises his options

c. The trader has to buy 100 shares of the stock in the end no matter what happens

d. The trader has to sell 100 shares of the stock in the end no matter what happens

Reference no: EM13978884

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