SIE - Securities Industry Essentials Exam
Preview Mode
An investor bought 7 ABC company 50 calls. At expiration, the stock price was $58 and the call options were not sold. What is the resulting position for the investor?
Long 700 shares of ABC
A
Short 700 shares of ABC
B
A credit to his account of $5600
C
A credit to his account of $800
D
Explanations
Equity options are settled in the underlying stock (opposed to index options that are settled in cash). The result is the trader being long 700 shares of ABC at a price of $50 per share.