Question
In: Finance
You short a put with strike K. The underlying price at expiration is S. What's your...
You short a put with strike K. The underlying price at expiration is S. What's your payoff?
Group of answer choices
S - K if K > S, and zero otherwise.
0
K - S
S - K
What's the payoff at maturity to a long call with strike K and underlying asset price S?
Group of answer choices
max(S-K,0)
min(S-K,0)
max(K-S,0)
min(K-S,0)
What's the payoff at maturity to a long put with strike K and underlying asset price S?
Group of answer choices
max(K-S,0)
max(S-K,0)
min(S-K,0)
min(K-S,0)
What's the payoff at maturity to a short call with strike K and underlying asset price S?
Group of answer choices
both
-max(S-K,0)
min(K-S,0)
neither
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You long a call option with a strike price of K. The underlying asset price on...
You long a call option with a strike price of K. The underlying
asset price on expiration date is S. What is your payoff?
Group of answer choices
S - K if S > K, but zero otherwise.
K - S if K > S, but zero otherwise.
0
S - K
You short a call option with a strike price of K. The underlying
asset price on expiration date is S. What is your payoff?
Group of answer choices...
A call with a strike price of $44 costs $4. A put with the same expiration...
A call with a strike price of $44 costs $4. A put with the same
expiration date and a strike price of $40 costs $3. Calculate the
profit/loss the investor makes from a short strangle at expiration
date stock prices of (i) $38, (ii) $42, and (iii) $46. For what
range of expiration date stock prices will the investor make a
profit?
Given the following: Call Option: Strike Price = $60, expiration costs $6 Put Option: Strike Price...
Given the following:
Call Option: Strike Price = $60, expiration costs $6
Put Option: Strike Price = $60, expiration costs $4
In excel, show the profit from a straddle for this. What range
of stock prices would lead to a loss for this?
Including a graph would be helpful.
Explain how the time to expiration, volatility, and price of the underlying stock impact but put...
Explain how the time to expiration, volatility, and price of the
underlying stock impact but put and call options prices.
Suppose you short a put option with a strike price of $20 and long another put...
Suppose you short a put option with a strike price of $20 and
long another put option with a strike price of $18. Assume the
premium for the first option is $1 and the premium for the second
option is $0.5. Which of the following is correct?
You wish the stock price stays above $20.
If stock price is at $19.8, you have incurred a loss.
You only have a loss if the stock price goes below $18.
You only...
Consider a 1000-strike put option on the S&R index with 6 months to expiration. At the...
Consider a 1000-strike put option on the S&R index with 6
months to expiration. At the time the option is written, the put
writer receives the premium of $74.20. Suppose the index in 6
months is $1100. The put buyer will not exercise the put. Thus, the
put writer keeps the premium, plus 6 months’ interest, for a payoff
of 0 and profit of
$75.68.
If the index is $900 in 6 months, the put owner will exercise,
selling the...
-European call and put options with 3 months of expiration exist with strike price $30 on...
-European call and put options with 3 months of expiration exist
with strike price $30 on the same underlying stock. The call is
priced at $3.5, the put is priced at $1.25, while the underlying is
currently selling for $28.5.
a) What is the net profit for the buyer of the call if the stock
price at expiration is $36?
b) What is the net profit for the seller of the call if the
stock price at expiration is $38?...
Given the following 3 put options that have the same expiration date: A: Strike Price =...
Given the following 3 put options that have the same expiration
date:
A: Strike Price = $110, Market Price = $6
B: Strike Price = $120, Market Price = $10
C: Strike Price = $130, Market Price = $16
Explain how a butterfly spread can be created. Create a table in
excel showing the profit from this. What range of stock prices
would lead to a loss from this?
Problem 3 – Naked Put A put with the strike price of $40 was sold short...
Problem 3 – Naked Put
A put with the strike price of $40 was sold short at $4.20 when the
price of the underlying stock was $38.00 per share. Draw the
gain/loss chart for the naked put.
You wrote(sold short) 1 put option when the put option price was $2, the underlying stock...
You wrote(sold short) 1 put option when the put option price was
$2, the underlying stock price was $50, and the delta of the put
option was -0.65. To achieve delta neutrality, you shorted some
shares of the underlying stock. Please fill in the blanks in the
following table.
Please show calculations.
Week
Stock price
Put option price per share
Delta
Number of additional shares shorted
Proceeds from short selling additional shares
0
50.00
2
-0.65
1
48.12
3.6
-0.80...
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