Type the Excel formula for the profit per share of the HOLDER of a call with strike 50 bought for a premium of 3.20, with the expiry share price in B1.
Type the Excel formula for the profit per share of the HOLDER of a call with strike 50 bought for a premium of 3.20, with the expiry share price in B1.
Answer
=MAX(B1-50,0)-3.20
B1 = 58 → 4.80; B1 = 46 → −3.20. The MAX floors the payoff at zero; the premium is subtracted whatever happens.
OpenStax Principles of Finance §20.3 — terminology and one call diagram, reference only; OpenStax Introduction to Business §16.6 (CC BY 4.0); m-x.ca equity-options specifications — 100 shares, American style, physical settlement, CDCC-cleared, third-Friday expiry (verified-facts §2.4 J16/J07, CONFIRMED 2026-09-17); original company and figures