Maturity of six months has premium bid price

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Reference no: EM132010467

A call option on the SGD with a strike price of 0.71 USD/SGD and a maturity of 6 months has a premium bid price of 0.06 USD, and a 1penny bid-ask spread. If you sell these options today on 10,000 SGD, and at maturity the SGD is quoted at bid price of 0.88 USD/SGD, with a 1 penny bid-ask spread, what is your net profit on this position? Note: pay careful attention to which side of the quote you will be trading with at each step.

Reference no: EM132010467

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