Solved: Hsbc stock is currently trading at 4758 pound sterling, Accounting Basics

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Hsbc stock is currently trading at 4758 pound sterling

Question: HSBC stock is currently trading at £475.8 (Pound sterling). George decides to write a covered call on the stock by writing one call with a strike of £490 and buying 100 shares of stock at the current market price. The option premium he receives is £250. Assuming the stock does not pay any dividends until the expiration of the option:

a. What is the total profit if the stock price remains unchanged?

b. What is the total profit if the stock price goes up to £500?

c. What is the total profit if the stock price goes down to £450?

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Accounting Basics: Hsbc stock is currently trading at 4758 pound sterling

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Accounting Basics: Hsbc stock is currently trading at 4758 pound sterling

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