Now let’s say you believe ikea stock will increase in the price of $40/share, so you decide to purchase a may call option for 200 shares for a 30-day time limit. assume that 1 call option contract equals 100 shares and the call premium per share is $3/share (6 points total)
a. are you the long call or short call option? are you the buyer or seller?
b. how much will you spend on the entire call option contract? assume the price of the share increased to $80 per share,
c. would you exercise the call option?
d. how much would be your gain or loss? assume the price of the share decreased to $20 per share,
e. would you exercise the call option?
f. how much would be your gain or loss?