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A trader writes 10 ATM calls at premium Rs 8 each (lot 100). If underlying ends at strike at expiry, profit/loss is:
ALoss of Rs 8,000
BProfit of Rs 800
CProfit of Rs 8,000
DBreak-even at zero profit
Answer & Solution
Correct answer: C. Profit of Rs 8,000
1. Identify what the question asks: this concept maps to shortcallprofit (§6.6.2).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 9 "Derivatives Analysis and Valuation"_
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