Determine the maximum profit and maximum loss

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Reference no: EM132803120

Question - Actual data on AT&T options shown below. Source: CBOE, December 10, 2020

Closing stock price $30.74

Exercise price $33.00

Call option value (= call premium) = $0.72

Put option value (= put premium) = $3.65

Options expire April, 2021

A. If you write sell the call option, determine the maximum profit, maximum loss, & breakeven point, per share. Ignore commissions & taxes. Show all work or explain your answers.

B. For the put option, calculate its "speculative premium." Show all work.

Reference no: EM132803120

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