The most you can lose on going long a call option is the amount you paid for the option. You paid $200 for the option to buy the shares at $118 and the market price is $110 so the options are not "in the money". Therefore, assuming the $110 is the price that is being applied through the life or duration of the option, it remains below your strike price so the options are worthless. This is a fairly simplistic example they are using as it does not account for the duration of the options as out of the money options still have value based on the volitility of the asset the options are for, as well as the remaining time until expiration.

But to keep it simple, you cannot lose more than what you paid for the option when you are long a call (long meaning buying the option).

Michael hasn't lost anything (unless the option has expired).

If the option has expired with the share price at $110 then he will lose his investment of 200 x 100 x $1=$20000 assuming one option contract is 100 shares.

If he bought 2 contracts then he loses 2x100x$1=$200

Michael bought 200 call options for $1 each. The strike price is $118 and the market price is $110. How much did Michael make or lose on his investment?

This problem initially seemed pretty easy. I thought I had it done with the right answer in a few seconds actually ($110 market price - $118 strike price - $1 per call option = -$9 x 200 call options = -$1,800). However, I looked at the answer my professor had typed out on the answer key and my answer was way off. The answer key says the right answer is -$200 and now I am extremely confused on how to get that answer. I had missed the previous lectures due to a sickness so it's probably just a stupid misunderstanding. Her notes aren't exactly the clearest. If someone could show me how to get the correct answer it would be greatly appreciated. Thanks!