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Earn
An Extra 5%-10% Per Month Page
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Stock
Price Remains The Same:
If the stock price
were to remain at the same level for the entire 39
days the option would expire worthless and you could
keep the $812 call premium plus retain your 100
share of stock at its current value of $138 1/8.
Owning Stock Alone:
$138 1/8 (current price) – $138 1/8 (purchase
price) = $0 per share
profit.
With Covered Call:
$138 1/8 (current price) – $138 1/8 (purchase
price) + $8 1/8 (call premium) = $8 1/8 per share
profit or $812.
Stock
Price Goes Down:
If the stock were to
decline in value and on expiration day closed at
$132 1/4, the call option would expire worthless and
you could keep the $812 call premium and would still
be an owner of the stock at its current value.
Owning Stock Alone:
$132 1/4 (current price) – $138 1/8 (purchase
price) = $5 7/8 per share loss or (-$588).
With Covered Call:
$132 1/4 (current price) – $138 1/8 (purchase
price) + $8 1/8 (call premium) = $2 1/4 per share
profit or $225.
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