Reading 28 - Option - Example 1

call Option price $7, exercise price $100 and underlying price is $98

the question asks what is maximum profit to buyer?

I thought it was unlimited. but the answer came up with $8.

I can’t understand how its $8. Can someone explain?


anybody? nobody?

Not sure what you are looking at, I am looking at my 2014 book - and for example 1 of the reading - Max Profit is infinite.

Is there any erratum for this?

Are you reading the symbol ∞ (infinity) as 8 by any chance?

also - please note this is “optional” material in the 2014 book - not sure about now.

In my copy of the curriculum it says that the maximum profit to the buyer is infinite (∞).

Thank you guys!! really appreciated. i opened the web version in chrome and it didn’t handle the character it seems… somehow changed it to 8

thanks for confirming…

Have you tried reading it lying on your side?

lol… that trick worked… cool