Calculate Option Profit And Loss
Series 7 · Flashcards · Application
SERIES 7 · FLASHCARDS
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QUESTION
What is the maximum loss for a long call bought for a
4
4
4
premium (per share)?
QUESTION
What is the maximum gain for a short put that receives a
2
2
2
premium (per share)?
QUESTION
What is the break-even for a long
50
50
50
put purchased for a
3
3
3
premium?
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ANSWER
47
47
47
. The put breaks even when stock falls to $50 - $3, offsetting the premium cost.
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