Not exact matches
Stock above the strike price If ZYX advances to 50 at expiration, the covered call writer,
upon assignment, will obtain a net profit
of $ 875 per
contract (the
exercise price
of 45 less the price
of the stock when the
option was sold plus the
option premium received
of 3 1/4 X 100).
This means that,
upon exercise, a portion
of the
option premium would be retained and the loss would then be 2 1/2 points or $ 250 per
contract.
Upon exercise of the
option, the delivery
of the futures position by the writer
of the
option to the holder
of the
option will be accompanied by the delivery
of the accumulated balance in the writer's futures margin account which represents the amount by which the market price
of the futures
contract, at
exercise, exceeds (in the case
of a call) or is less than (in the case
of a put) the
exercise price
of the
option on the futures
contract.