**ZYX is between $45 and $48.25 at expiration**

With ZYX exactly at the strike price of $45 at expiration, the $45 call would be exactly at-the-money and have no value. With ZYX at the break-even point of $48.25 at expiration the call's intrinsic value would be $3.25, or its initial cost. With ZYX closing between $45 and $48.25 at expiration, the $45 call will be in-the-money and have an intrinsic value of less than its initial cost. In this case the option could be sold to recoup some of its original purchase price resulting in a partial loss for the position.

For example, ZYX closes at $47 at expiration. The call's intrinsic value at this point would be:

$47.00 ZYX stock price

__ -$45.00__ call strike price

$2.00 intrinsic value

ZYX did rise in value, but not as much as anticipated. The option that cost $3.25 is now worth $2, so the investor can sell the call and recoup some of its initial purchase price. If the ZYX 45 call is sold for its intrinsic value of $2 then the loss for the position would be:

$3.25 premium initially paid for call

__$2.00__ premium received at call's sale

$1.25 partial loss

The call could also be exercised. 100 shares of ZYX would be purchased at the contract's strike price of $45 per share plus the $3.25 call premium paid, or a net price of $48.25 per share. The stock could either be sold in the marketplace or held in anticipation of continued profits on the upside.

Instead of purchasing the call, had the stock been purchased outright at $44.25 per share and increased in price to $47 at expiration, it would then be worth a total of $4,700. The result is a 6.2% return over the initial stock investment of $4,425 versus a partial loss of $125 from an initial investment of $325 for the option investor. However, the call buyer could have earned interest on $4,100 not committed to the initial stock purchase, which could offset some of the option loss.