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blasher

05/22/10 10:19 PM

#70 RE: medge1 #69

hhmmm . . you asked the question in a confusing way . . .
so I will answer the best I can in broad terms:

If at expiration (3rd Friday in Sept), the contract would be worth $5.00 - $2.50 = $2.50 = the difference between the stock price and the strike-price

if the underlying stock reached $5.00 sometime before Expiration,
then it would be worth that $5.00 (intrinsic value) PLUS the "time portion" . . .
the risk value in Holding it longer.

Let me know if you have a more specific question.