Chris purchased a call option on nov 18 th 2016 for $500. the option gave him the right to buy 100 shares of vectron stocks for $45 per share. he sold option for $550 on dec 15 th 2017 when the price of the stock was $48 a share. how much capital gain should report on his 2017 return?

a-$0

b-$50

c-$200

? d-$300

correct answer is B $50

Explanation:

given data

purchase = $500

right to buy = 100 shares

stocks = $45 per share

sold = $550

price of stock = $48

solution

As we know that capital gain should be reported as difference between the buy and sell price so

here capital gain = sold price - purchase price 1

put here value

capital gain =  $550 - $500

capital gain = $50

so correct answer is B $50