> What happens if you bought calls for a price higher than $420? They are worthless.
To be fair, they always were worthless at best, the company would be bought at $420 (and no higher).
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I think you mean "bought calls at strike price $400" (leaving ~$20 buffer before the presumed buyout price). If Tesla were bought at $420, then calls at strike $400 would be worth $20 each.
Of course, as the $420 buyout price is falling apart, a call@400 is looking pretty worthless right now.
To be fair, they always were worthless at best, the company would be bought at $420 (and no higher).
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I think you mean "bought calls at strike price $400" (leaving ~$20 buffer before the presumed buyout price). If Tesla were bought at $420, then calls at strike $400 would be worth $20 each.
Of course, as the $420 buyout price is falling apart, a call@400 is looking pretty worthless right now.