715 An extreme situation For an American call option with S=100,7=0.25,X=60,r=5%,D=0 Should you exercise if 1. You want to hold the stock over the next 3 months? 2. You do Not feel that the stock is worth holding for the next 3 months? Options, Futures, and Other Derivatives, 4th edition@ 2000 by John C. Hull Tang Yincai, Shanghai Normal UniversityOptions, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, Shanghai Normal University 7.15 An Extreme Situation • For an American call option with S0 = 100, T = 0.25, X = 60, r = 5%, D = 0 – Should you exercise if … 1. You want to hold the stock over the next 3 months? 2. You do NOT feel that the stock is worth holding for the next 3 months?