Call Options
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An investor buys 1 XYZ May 60 call at 3.5.
What is the investor's break even point?
What is his maximum potential gain? why?
hat is the investor's maximum potential loss? Why?
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Solution Summary
Calculation of break even point, maximum potential gain and maximum potential loss for an investment in call option.
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An investor buys 1 XYZ May 60 call at 3.5.
1) What is the investor's break even point?
the premium paid= $3.50
Strike price= $60.00
The investor gains if the stock price increases beyond the strike ...
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