Suppose you purchase 6 put contracts on Testaburger Co. stock.
The strike price is $35, and...
Suppose you purchase 6 put contracts on Testaburger Co. stock.
The strike price is $35, and the premium is $1.50. If, at
expiration, the stock is selling for $31 per share, what are your
put options worth? What is your net profit?
You purchase 15 put option contracts on ABC stock. The strike
price is $22, and the premium is $0.5. The contract size is 100
shares.
1. If the stock is selling for $20 per share at expiration, what
are your put options worth?
2. What is your net profit?
3. What if the stock were selling for $21? $22?
need full steps, thx!!!
You are long 6 contracts of 2-yr put option on QQQ with
a strike price (K) of $200. What will be your payoff at expiry if
QQQ price at expiry (S_T) is $250?
Suppose that put options on a stock with strike prices $30 and
$35 cost $4 and $7, respectively. How can the options be used to
create (a) a bull spread and (b) a bear spread? For both spreads,
show the profit functions for the intervals defined by the strike
prices, and their graphical representation.
Suppose that put options on a stock with strike prices $30 and
$35 cost $4 and $7, respectively. They both have 6-month
maturity.
(a) How can those two options be used to create a bear
spread?
(b) What is the initial investment?
(c) Construct a table that shows the profits and payoffs for the
bear spread when the stock price in 6 months is $28, $33 and $38,
respectively. The table should look like this:
Stock Price
Payoff
Profit
$28...
You purchase 18 call option contracts with a strike price of
$100 and a premium of $2.85. Assume the stock price at expiration
is $112.00.
a. What is your dollar profit? (Do not
round intermediate calculations.)
b. What is your dollar profit if the stock
price is $97.95? (A negative value should be indicated by a
minus sign. Do not round intermediate calculations.)
You purchase 17 call option contracts with a strike price of $95
and a premium of $3.75. Assume the stock price at expiration is
$102.46.
a. What is your dollar profit? (Do not round intermediate
calculations.)
b. What is your dollar profit if the stock price is $88.41?
A. An investor buys for $3 a put with strike price of $35 and
sells for $1 a put with a strike price of $30. What is this
strategy called? What are the payoffs and profits if the stock
price is above $35, below $30, and between $30 and $35?
B. The common stock of the P.U.T.T. Corporation has been trading
in a narrow price range for the past month, and you are convinced
it is going to break far...
Q3. Suppose you write 30 put option contracts with a strike of
$100 and expiring in 3 months. The put options are trading at
$4.80. What is your net gain/loss if the underlying stock price at
maturity is $110? What is the break-even price when your profit
from this investment is zero?
Q4. A strangle is created by buying a put option, and buying a
call on the same stock with higher strike price and same
expiration. A put with...
A call with a strike price of $60 costs $6. A put with the same
strike price and expiration date costs $4. For each of the
intervals defined by the strike price, show the profit functions
associated with forming a straddle (long position), and its
graphical representation. For what range of stock prices would the
straddle lead to a loss?
A stock currently sells for $32. A 6-month call option with a
strike price of $35 has a price of $2.27. Assuming a 4%
continuously compounded risk-free rate and a 6% continuous dividend
yield:
a)What is the price of the associated put option?
b)What are the arbitrage opportunities if the price of the put
option was $5?
c)What if this price was $6?