What is the investors position on underlying asset

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Reference no: EM131312675

Suppose that an investor writes a March call option with a strike price of $50. Assume that the call option investorwrote was sold for $2.50. a) What is the investor’s position (long or short) on the underlying asset? b) What is the investor’s position (long or short) on the option? c) Considering the price range between $40 and $60 for the underlying stock, draw both the investor’s and the counterparty’s profit diagramfor this option on the same graph.

Reference no: EM131312675

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