Suppose that a trader sold a Call option on a stock at strike price $25.00 for a premium of $2.50 per share. At the expiration of the Call option, the market price of the stock is $26.25 per share. The Call writer's net profit from the Short Call position would be
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In this case, the breakeven point would be $25.00 + $2.50 = $27.50 per share. Show more…
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