The risk is that the stock shoots way above your agreed
upon strike price.
Not exact matches
You agreed to sell those 100 shares at an agreed -
upon price, known as the
strike price.
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).
Whoever is long, the floor is paid
upon maturity of the floorlets if the reference rate is below the floor's
strike price.
For a small premium, stock options give the purchaser the right, but not the obligation, to purchase or sell the underlying stock at an agreed -
upon price, known as the
strike price, before an agreed -
upon date, known as the expiration date.
Upon marketing the
strike price is often reached and creates lots of income for the «caller.»
Wouldn't the only logical way to handle this be to adjust the
strike prices based on the stock conversion ratio agreed
upon in the merger?