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Stock Options Worksheet - Pfizer Identify the stock and its ticker symbol that you are using...

  1. Stock Options Worksheet - Pfizer

  2. Identify the stock and its ticker symbol that you are using in this assignment. Provide its last traded price.

  3. Company Name

    Ticker Symbol

    Last Traded Price
  4. Obtain one of each for Call Option quotes and Put Option quotes. The TWO quotes must meet the following two criteria:
    1. The strike price is approximately equal to the stock’s last traded price you wrote down earlier on your note paper.
    2. The expiry date is in three to six weeks.

  5. Call Option

    Expiry (Month/Year)

    Strike

    Symbol

    Last

    Open Interest

    Put Option

    Expiry (Month/Year)

    Strike

    Symbol

    Last

    Open Interest
  6. Answer the following questions:
    1. What are the intrinsic values of each option?
    1. What are the option time values of each option?
    1. Assume each option’s contract size is 100 hundred shares. Given the holdings of this stock in your individual portfolio, describe an option strategy utilizing calls. Discuss the costs incurred and possible benefits of such a strategy.  

Solutions

Expert Solution

  1. Stock Options Worksheet - Pfizer

  2. Identify the stock and its ticker symbol that you are using in this assignment. Provide its last traded price.

  3. Company Name

    Ticker Symbol

    Last Traded Price
    Pfizer, Inc. PFE 36.70
  4. Obtain one of each for Call Option quotes and Put Option quotes. The TWO quotes must meet the following two criteria:
    1. The strike price is approximately equal to the stock’s last traded price you wrote down earlier on your note paper.
    2. The expiry date is in three to six weeks.

  5. Call Option

    Expiry (Month/Year)

    		 (Sep / 2019)

    Strike

    Symbol

    Last

    Open Interest
    36.50 PFE 2.22 7

    Put Option

    Expiry (Month/Year)

    		 (Sep / 2019)

    Strike

    Symbol

    Last

    Open Interest
    37 PFE 0.98 505
  6. Answer the following questions:
    1. What are the intrinsic values of each option?

Intrinsic value of Call option = S - K = 36.70 - 36.50 = $ 0.20

Intrinsic value of Put option = K - S = 37 - 36.70 = $ 0.30

  1. What are the option time values of each option?

Call option time value = C - 0.20 = 2.22 - 0.20 = $ 2.02

Put option time value = P - 0.30 = 0.98 - 0.30 = $ 0.68

jeff jeffy answered 6 months ago
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