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22 May, 11:19

Chris purchased a call option on Nov 18 th 2016 for $500. The Option gave him the right to buy 100 shares of Vectron stocks for $45 per share. He sold option for $550 on Dec 15 th 2017 when the price of the stock was $48 a share. How much capital gain should report on his 2017 return?

A-$0

B-$50

C-$200

? D-$300

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Answers (1)
  1. 22 May, 12:34
    0
    correct answer is B $50

    Explanation:

    given data

    purchase = $500

    right to buy = 100 shares

    stocks = $45 per share

    sold = $550

    price of stock = $48

    solution

    As we know that capital gain should be reported as difference between the buy and sell price so

    here capital gain = sold price - purchase price ... 1

    put here value

    capital gain = $550 - $500

    capital gain = $50

    so correct answer is B $50
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