Options Scenarios

Front

What is the maximum profit from selling a call option with a $190 strike price on 100 shares of Apple (AAPL) at $180, collecting a $3 premium per share?

Back

$1300

Answer explanation

Explanation: ($190 - $180) + $3 premium = $13/share × 100 = $1,300

Front

You sold a covered call on 100 shares of Coca-Cola (KO) with a $65 strike. The stock rises to $70 before expiration. What happens?

Back

Your shares are called away at $65

Answer explanation

Shares are sold at strike, not market price.

Front

You sell a cash-secured put on Microsoft (MSFT) with a $300 strike, expiring in 2 weeks, and receive a $4 premium. The stock falls to $290 by expiration. What happens?

Back

You are assigned and sell the stock at $300

Answer explanation

Shares are sold at strike, not market price.

Front

You sell a $150 strike put on a stock trading at $155. The stock rises to $160 by expiration. What is your outcome?

Back

You keep the premium and avoid buying the stock

Front

You buy a LEAPS call on Tesla (TSLA) with a $250 strike price, expiring in 18 months. You paid $25 per share. TSLA rises to $320 in a year. Why might you hold the LEAPS instead of exercising it?

Back

It still has significant time value

Front

You buy a LEAPS call with a $50 strike on a growth stock. One year later, the stock is at $70, and your option is worth $23 (you paid $10 originally). What is your profit per share if you sell the option now?

Back

$13

Answer explanation

$23 - $10 = $13 per share