Stan Freifeld
This will be my last option challenge. Each month over the last year, I have published challenge question. Our company has provided valuable prizes totaling thousands of dollars for those who have responded correctly and timely. More importantly, we hope the challenges have been fun and have helped you learn about trading. If you have an interest in our consulting or one-on-one mentoring programs, feel free to contact me by clicking here.
Every participant who answers this week's question correctly within 7 days will receive complimentary access to The Option Strategist Newsletter Volume 4.* Good Luck!
Stan’s Options Challenge: Question #12
On a Friday one week before expiration, a trader buys 100 of the XYZ September 190/192 Bull Call spreads for 1.60. She was hoping that on expiration XYZ would be greater than $192 and she would make $4,000 before expenses. She didn’t know that XYZ was going ex-dividend for .45 on the Thursday before expiration. That Thursday morning, the trader is notified that she was assigned on 90 of the September 192 Calls. She takes no action and on expiration (the following day) the stock closes above 192 and so she is assigned on the 10 remaining 192 Calls and all 100 of the 190 Calls are exercised. At that point the trade is over and she has no stock or options position in XYZ. Ignoring commissions and other expenses, what was her gain or loss on this trade?
A) $500 Loss
B) $50 Loss
C) breakeven
D) $50 Gain
E) $4,000 Gain
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*Answers must be received by 11:59 PM eastern time on 11/10/14. Participants may only submit 1 answer. The complimentary access to the download will begin after the conclusion of the 1 week period. Winners will receive an email containing a unique coupon code for the product.
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