If a stock is trading $40, a 50-strike price call will be priced higher than a 60-strike price call.
With the stock trading $40, a $50 strike price call will be only $10 out of the money while a $60 strike price call will be $20 out of the money. Being that the 50 strike price call starts to profit at a better price point, it will have more value.
An option that expires in September will have more value than an option that expires in October.
False, the more time an option has the more value it will have. October is a further out than September.
If you buy two contracts of the ABC 100-strike price puts for $1.50 per contact. How much will this cost you?
If the option is priced at $1.50, and each option contract settles into 100 shares, and you buy 2 contracts, then the total cost will be $300.
$1.50 price x 100 shares x 2 contracts = $300
On expiration, if stock XYZ is trading $47, a 50-strike price call will be worth how much?
On expiration options are only worth their intrinsic value. So a 50 strike price call would not have any intrinsic value until the stock traded over $50. On expiration and only trading $47 it is out of time and worth nothing.
On expiration, if stock XYZ is trading $47, a 50-strike price put will be worth how much?
On expiration options are only worth their intrinsic value. Here the holder of a 50 strike price put can sell the stock for $50 when its true value is only $47. This means the option is worth $3.
Note, the price paid has nothing to do with the options value at any other point in time.
