The following price quotations are for exchange-listed options on Primo Corporation common stock.
Company Strike Expiration Call Put Primo 61.12 55 Feb 7.25 .48 With transaction costs ignored, how much would a buyer have to pay for one call option contract. Assume each contract is for 100 shares.
Price of call option = Call value * Number of shares in a contract
Where Call value = $7,25, Number of shares in the contract = 100
So, Price of call option = $7.25 * 100 shares
Price of call option = $725
So, the buyer would have to pay $725 for one call option contract assuming each contract is for 100 shares.
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