If the market price of XYZ drops below $70.00, the buyer will not exercise the call option, and your payoff will be $6.20. If XYZ's market price rises above $70.00, however, the call seller is ...

The payoff schedule here is exactly the opposite to that of the call buyer: For every price below the strike price of $20, the option expires completely worthless, and the call seller gets to keep ...

The higher the stock price, the more the option is worth. The difference between the stock price and the exercise price is the "payoff" to the call option. The Black-Scholes Formula was derived by ...

A call option is a contract that guarantees its owner the right to buy a certain number of shares of a stock at a particular strike price on or before a specific expiration date. A call option is ...

Specifically, a scheduled dividend payment will lower the extrinsic value of call options offered in the relevant series, as the market anticipates a predicted ex-div decline in the shares.

In that case, your payoff more than offsets the option premium, resulting in profit of $4 on the trade. For a call seller (short), the opposite is true. They collect, or earn, the premium when ...

A call option is a contract that gains value when the underlying stock rises. In the most basic sense, then, a call option is a bet that the underlying security will rise in price, enabling you to ...