You wrote a covered call (i.e., sell a call option on the stock already owned) with a strike price of $30 and an option premium of $2.20. Assume the stock price goes up to $35 a share at the option expiration. As a result, you will:

keep the option premium but lose your shares of stock

los both your stock and option premium

los the option premium but get to keep the stock

lose an amount equal to the option premium

keep both your stock and the option premium

The strike price of the sold call option is $30

X = 30

The option premium is $2.20

C = 2.20

The stock price at expiry is $35

St = 35

By selling a call option with the strike price of $30, we have agreed to sell our stock at this price if the stock price goes above the strike price of $30 at expiration date. For this obligation we have collected a premium of $2.20.

Since, the stock price at expiration date is greater than the strike price we sell our stock at $30 and keep the premium.

So, option A is correct.

We lose shares but keep the option premium. The option premium is ours to keep regardless of where the stock price is at expiration.

Option B is incorrect because we do not lose option premium, but we lose shares of stock.

Option C is incorrect because we never lose the option premium, but since the stock price at expiration is greater than the strike price, we lose shares of stock.

Option D is incorrect because we don't lose anything. We only give up the profits above the strike price for the exchange of option premium.

Option E is incorrect because we get to keep both the stock and option premium only when the stock price at expiration is less than or equal to the strike price.