Initial stock price (
S
0
S
0
​
): 50
Stock price at expiration (
S
T
S
T
​
): 60
Strike price (
K
K): 55
Premium received (
P
P): 2
Number of shares (
n
n): 100

To calculate the profit or loss from selling an option under these conditions, we need to consider both the intrinsic value of the option at expiration and the premium received. Let's break down the details step-by-step:

### Given Data
- Initial stock price ($S_0$): $50
- Stock price at expiration ($S_T$): $60
- Strike price ($K$): $55
- Premium received ($P$): $2
- Number of shares ($n$): 100

### Steps to Calculate Profit or Loss

1. **Determine the intrinsic value of the option at expiration:**
   - The intrinsic value of a call option at expiration is given by:
     \[
     \text{Intrinsic Value} = \max(S_T - K, 0)
     \]
   - Plugging in the given values:
     \[
     \text{Intrinsic Value} = \max(60 - 55, 0) = 5
     \]

2. **Calculate the total premium received:**
   - The total premium received is the premium per option multiplied by the number of shares:
     \[
     \text{Total Premium} = P \times n = 2 \times 100 = 200
     \]

3. **Calculate the total intrinsic value at expiration:**
   - The total intrinsic value is the intrinsic value per share multiplied by the number of shares:
     \[
     \text{Total Intrinsic Value} = \text{Intrinsic Value} \times n = 5 \times 100 = 500
     \]

4. **Calculate the profit or loss:**
   - Since the option was sold, the profit or loss is determined by subtracting the total intrinsic value at expiration from the total premium received:
     \[
     \text{Profit/Loss} = \text{Total Premium} - \text{Total Intrinsic Value}
     \]
   - Plugging in the values:
     \[
     \text{Profit/Loss} = 200 - 500 = -300
     \]

### Conclusion
- The seller of the call option will incur a loss of $300.

Would you like further details or have any questions? 

Here are 8 related questions to expand on this information:

1. How does the initial stock price affect the calculation of option profit/loss?
2. What happens to the profit/loss if the stock price at expiration is lower than the strike price?
3. How would the profit/loss change if the number of shares was different?
4. Can you explain the concept of intrinsic value in options trading?
5. How would the profit/loss be affected if the premium received was higher?
6. What is the significance of the strike price in an options contract?
7. How is the break-even point for the seller of a call option calculated?
8. What are some strategies to mitigate losses in options trading?

**Tip:** In options trading, always be aware of the potential for losses, and consider using strategies like hedging to manage risk.

Learn how to calculate the profit or loss from selling a call option using initial stock price, stock price at expiration, strike price, and premium received. Understand the concept of intrinsic value in options trading. Suitable for advanced learners in finance and trading.

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