Ask Question
BusinessBusiness
10 May, 05:11

A customer sells short 100 shares of ABC at $35 and buys 1 ABC Jul 35 Call @ $3. The stock falls to $30 and the customer closes the option contract at $1 and buys the stock at the current market price. The customer has a:A. $200 lossB. $300 lossC. $200 gainD. $300 gain

+5
Answers (1)
  1. 10 May, 06:33
    0
    The answer is $300 gain.

    Explanation:

    Operations:

    Short 100 shares of ABC at $35 each = 100 * 35 = + $3,500 Buy 1 ABC Jul 35 Call @ $3 (one call equals to 100 shares) = 100 * (3) = $ (300), accumulated = + 3,500 - 300 = + 3,200 Closes the option contract at $1 = 100 * 1 = + $100, accumulated = + 3,200 + 100 = + 3,300 Buys the stock at the current market price (buys 100 stock @ $30 each) = 100 * (30) = $ (3,000), accumulated = + 3,300 - 3,000 = + $300.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A customer sells short 100 shares of ABC at $35 and buys 1 ABC Jul 35 Call @ $3. The stock falls to $30 and the customer closes the option ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
United brands corp. just completed their latest fiscal year. the firm had sales of $16,650,000. depreciation and amortization was $832,500, interest expense for the year was $825,000, and selling general and administrative expenses totaled
Answers (1)
Kansas Enterprises purchased equipment for $73,500 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $6,300 at the end of five years.
No Answers
The facility is implementing a new information system that will require conversion of healthcare data. the conversion is:
Answers (1)
Today the economic systems of most nations could accurately be classified as
Answers (1)
How do you feel about his or her emotional and physical ability to handle the responsibility involved in provided daily child care
Answers (2)
New Questions in Business
In the context of the various roles employees take up in an organization, who among the following is most likely to spend a lot of their time listening?
Answers (1)
Because email, chat, and text messages are less formal methods of communication, good technical writing skills are less important for these messages. O True O False
Answers (1)
Several years ago, the United States went to war with Iraq. This led to an increase in government expenditures and a decrease in private consumption and investment. What is the total effect of these circumstances on aggregate demand?
Answers (1)
If the technology is flexible it becomes more difficult to distribute manufacturing in many local facilities. it becomes more difficult to consolidate manufacturing in a few large facilities.
Answers (1)
A person buys a flat screen, plasma, theater-like television. the person has homeowner? s insurance. why would it be appropriate to add a personal property floater to that insurance?
Answers (1)
Home » Business » A customer sells short 100 shares of ABC at $35 and buys 1 ABC Jul 35 Call @ $3. The stock falls to $30 and the customer closes the option contract at $1 and buys the stock at the current market price. The customer has a:A. $200 lossB. $300 lossC.
Sign Up Forgot Password?