Find your net profit on option if ibms stock price

Reference no: EM13476281

You have taken a long position in a call option on IBM common stock. The option has an exercise price of $136 and IBM's stock is currently trading at $140. The option premium is $5 per contract.

a. What is your net profit on the option if IBM's stock price increases to $150 at expiration of the option and you exercise the option?

b. What is your net profit on the option if IBM's stock price decreases to $130 at expiration of the option?

Reference no: EM13476281

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