Series 7 - General Securities Representative Exam
Preview Mode
An investor wrote 18 ABC Corp Jan. 50 calls for $6.40 each. What is the investor's maximum gain?
$11,520
A
$640
B
Unlimited
C
$580
D
Explanations
When writing options, the maximum profit is the amount of premium received. In this case, it is $11,520 ($640 x 18)