FINRA Series 7 General Securities Representative Qualification Examination (GS) Series-7 Question # 82 Topic 9 Discussion
Series-7 Exam Topic 9 Question 82 Discussion:
Question #: 82
Topic #: 9
Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions.
$600. The maximum profit is the difference between strike prices less the debit amount. The debit amount is $4 ($7 - $3). The difference between strike prices is $10 ($60 - $50). Multiply the $6 difference by 100, which is the number of shares on one option.
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