I am studying derivatives and I got stock in a question. Can you help me?
An investor buys 10,000 shares of company ABC at R$30.00 each, and later performs a covered sale of 10,000 options with an exercise value of BRL 33.00, receiving a premium of BRL 0.20 per share.
On the exercise date, this share was quoted at R$34.00.
In this way, between buying and selling shares:
a) The investor was exercised, but profited BRL 5,000.00
b) The investor was not exercised and had no gain or loss given the share price on the exercise date
c) The investor was exercised and had no gain or loss given the share price on the exercise date
d) The investor was exercised, but profited BRL 2,000.00
I am trying to do this way:
- I considered it’s a PUT.
- So, 34 - 33 = 1.
So, 1 * 10000 = 10000
Once it’s a put, it receives the premium. This way, 0.20 * 10000 = 2000
10000 - 2000 = 8000
I think 8000 is the loss, but I don’t see this answers.
Can you guys help me? (I tried)