I am trying to calculate the point at which exercising a call option would be profitable.
I am looking at a call option for AAPL. The strike price is $320 and expires March 18th 2020. The price for this contract is $1025. Is the profit = $75 if the stock price moves up to $331?
I arrived at this number by:
future value if exercised ($33,100) =
possible future stock price ($331) * shares amount (100)
value at strike price ($32,000) =
strike price ($320) * shares amount (100)
profit before cost ($1,100) =
future value if exercised ($33,100) - value at strike price ($32,000)
final profit after accounting for cost ($75) =
profit before cost ($1,100) - call option cost ($1025)