What would be the profit or loss per share of stock to an investor who bought an October expiration Apple call option with an exercise price of $130 if Apple closed on the expiration date at $120? Assume the option premium was $3.00.

A) $0
B) $3.00 gain
C) $3.00 loss
D) $7.00 gain

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a specific price within a certain time frame.

Exercise Price

The set price at which an option contract can be exercised, determining the price at which the underlying security can be bought or sold.

Option Premium

The price that an investor pays to buy an options contract, which gives them the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price.