Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. why would someone need to use a call option? give

Why would someone need to use a call option? Give a scenario of why someone would...

90.2K

Verified Solution

Question

Finance

Why would someone need to use a call option? Give a scenario ofwhy someone would want to use one. Also, pick a stock that has acall option written on it and describe how it would benefit someonewho would purchase a call option. Showing math is required.

Answer & Explanation Solved by verified expert
3.7 Ratings (658 Votes)
Call option is an option to buy If a trader decides to exercisehis right then he will buy the shares of a company at the exercisepriceConsider an investor who is bullish expects that the stockprice will go up about the equity stock of Delia Industries Hebuys a 3month call takes a long position on the stock at anexercise price of Rs 400 by paying a premium of Rs 40 per shareThe profit diagram is as shown above He will make profit if    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Why would someone need to use a call option? Give a scenario ofwhy someone would want to use one. Also, pick a stock that has acall option written on it and describe how it would benefit someonewho would purchase a call option. Showing math is required.

Other questions asked by students

Q

What is the field of view of the 40x objective if the 4x objective has a...

Biology
Q

For this lab, you will be writing method definitions. These method definitions will be based on...

Programming
Q

Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2018–2020....

Advance Math
Q

Tally Total 9 I Tally II Total 11 Frec quency e

Biology
Q

Which means the opposite of positive A interesting B curious C hurtful D uncommon

Biology
Q

Ex 1 Given AB DC ZABC ZDCB Prove ZA ZD Ex 2 Given M is...

Geometry
Q

Use a calculator to perform the indicated operation 245 125 2893 26

Statistics
Q

Find the angle between the planes 8x 7y 10 and 4x 3y 10z 6 The...

Calculus
Q

deltamath com The function f x log x 3 4 is graphed below Plot all...

Algebra
Q

John Ward is 26 years old and single. He provides all of his own support....

Accounting
Q

At the time of his retirement Mr.x is given a choice between two...

Accounting
Q

Question 1 The following information has been taken from the books of Pisces Fisheries on...

Accounting