Assume a stock varies between the prices $40 and $45 every three days, and the current price is $42. The trader buys 1 CALL Option contract for a strike price of $60 that expires in a month.
- Can this trader make any profit if the stock has moved a dollar in the first day?
- How can this trader make some profit from Volatility only? What should happen to the stock to increase it's volatility?