| Description |
The Standard & Poor ’s Depositar y Receipts (SPDRs) is an exchange-traded fund
in the United States that is designed to track the S&P 500 stock market index.
The latest price of a share of SPDRs is $290. A trader has just bought call options
on shares of SPDRs for a premium of $3 per share. The call options expire in six
months and have an exercise price of $305 per share. On the expiration date, the
trader will exercise the call options (ignore any transaction costs) if and only if
the shares of SPDRs are trading: |