Question

In: Finance

calls puts strike jul aug oct jul aug oct 165 2.70 5.25 8.10 2.40 4.75 6.75...

calls puts
strike jul aug oct jul aug oct
165 2.70 5.25 8.10 2.40 4.75 6.75
170 0.80 3.25 6.00 5.75 7.50 9.00

1. Buy one august 165 call contract. Hold it until the option expire. Determine the profits and graph the results. Then identify the breakeven stock price at expiration. What is the maximum possible loss on this transaction

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -


Related Solutions

OCT 2020 PUTS - last price 7.90 ; vol - ; strike 28.00 1. You sold...
OCT 2020 PUTS - last price 7.90 ; vol - ; strike 28.00 1. You sold twenty Oct 2020 put contracts today at $7.90. Two weeks later the stock trades at $22.30 and the premium on the put is $9.90. How much money have you made or lost at this point in time? 2. Briefly explain whether selling uncovered calls is more, less or of equal risk than selling puts?
One stock is selling for $54 per share. Calls and puts with a $55 strike and...
One stock is selling for $54 per share. Calls and puts with a $55 strike and 360 days until expiration are selling for $8 and $4, respectively. What is the arbitrage profit, if we trade on one call and one put? Suppose a risk-free rate is 10%.
Consider the following table for calls and puts Call Delta Put Delta Strike price of 40...
Consider the following table for calls and puts Call Delta Put Delta Strike price of 40         0.60      - 0.40 Betty and Bob buy 1000 shares of stock and sell 12 calls. Algebraically find their Equivalent Share Position. Algebraically find how many Puts should they buy or sell to be Delta Neutral.
Strike Calls Puts Close Price Expiration Vol. Last Vol. Last Hendreeks 103 100 Feb 72 5.20...
Strike Calls Puts Close Price Expiration Vol. Last Vol. Last Hendreeks 103 100 Feb 72 5.20 50 2.40 103 100 Mar 41 8.40 29 4.90 103 100 Apr 16 10.68 10 6.60 103 100 Jul 8 14.30 2 10.10 a. Suppose you write 50 of the Feb 100 put contracts. What is your net gain or loss if Hendreeks is selling for $98.00 at expiration? For $114? $98 at expiration $114 at expiration
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT