Suppose that Boo writes 3 call contracts for TSLA at the strike price of $785 (highlighted row)….

Posted on | by Stevepiscles

Suppose that Boo writes 3 call contracts for TSLA at the strike price of $785 (highlighted row). This call expires on Friday, 10-1-2021 and the premium is $18.25 per share. Answer the following questions:

  1. Create the profit (loss) PER SHAREfor Boo’s position. Hint: What is Boo’s profit (loss) per share if TSLA is trading at $760, $785, and $805 at expiration.
  2. Based on the graph that you have created, what is the TOTALmaximum gain and TOTALmaximum loss for Boo’s position?
  3. Based on the graph that you have created, what is the price range that break-even price falls in between?
  4. How do you find out for sure what the break-even price is?