Question

In: Finance

Figure out the payoff and the profit per share. You sell a 45 call for 4,...

Figure out the payoff and the profit per share. You sell a 45 call for 4, and buy a 50 call for 2. Stock ends at $46.

Payoff =

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE


Related Solutions

EXERCISE #1: Options basics. Figure out the payoff and the profit per share in A-C: A....
EXERCISE #1: Options basics. Figure out the payoff and the profit per share in A-C: A. You sell a 47 put for 4. Stock ends at $48. Payoff=................ Profit=............................ B. You sell a 54 put for 4. Stock ends at $47. Payoff=................. Profit=.......................... C. You sell a 50 put for 3, and buy a 45 put for 2. Stock ends at $45. Payoff=................ Profit=............................ D. You buy a 52 put when the stock trades at 49. Intrinsic Value= ............. Premium...
What are both the payoff and the profit or loss per share for an investor in the following twosituations?
What are both the payoff and the profit or loss per share for an investor in the following twosituations?i. Jean buys the June, 2022 expiration Paypal call option for $6.40 with an exercise priceof $120, if the Paypal stock price at the expiration date is $132?ii. Joan buys a Paypal put option for $4.50 with the same expiration date and exerciseprice as Jean’s call option, and the Paypal stock price is also $132 at the expirationdate?
What is the total payoff when you buy a 950 strike call and sell a 1000 strike call?
Construct payoff diagram for the purchase of a 950-strike S&R call and sale of a 1000-strike S&R call. 
Payoff/profit of put/call? Payoff diagrams recognition (plain vanilla or strategies/combo) Profit diagrams recognition (plain vanilla or...
Payoff/profit of put/call? Payoff diagrams recognition (plain vanilla or strategies/combo) Profit diagrams recognition (plain vanilla or strategies/combo) Put-call parity concept Strategies: concepts. Eg. What strategy consists of what. Relationship between option value and other factors
Jackson Corporation stock is selling for $45 per share. An investor is considering buying a call...
Jackson Corporation stock is selling for $45 per share. An investor is considering buying a call option with an exercise price of $50. The investor is willing to pay the premium of 25 cents per option. Please work in excel and show how you derived the answer. A. Calculate the exercise value of the option? B. Why is an investor willing to pay 50 cents an option when the stock is going for $45? c. Calculate the exercise value if...
Stock in Cheezy-Poofs Manufacturing is currently priced at $45 per share. A call option with a...
Stock in Cheezy-Poofs Manufacturing is currently priced at $45 per share. A call option with a $48 strike and 90 days to maturity is quoted at $1.50. Compare the percentage gains or losses from a $70,000 investment in the stock versus a $70,000 investment in the options (e.g., $70,000 worth of options) if, in 90 days, the stock price is $40; if the stock price is $50; and if the stock price is $60.
At the beginning of the month, you sell short 200 shares of Wells Fargo that are currently selling at $45 per share.
At the beginning of the month, you sell short 200 shares of Wells Fargo that are currently selling at $45 per share. One month later you cover your short position at $52 per shares. During the month, Wells Fargo issued $2 dividend per share. What is you return during this month?-0.2000.200-0.156-0.1110.111
Misuraca Enterprise's current stock price is $45 per share. Call options for this stock exist that...
Misuraca Enterprise's current stock price is $45 per share. Call options for this stock exist that permit the holder to purchase one share at an exercise price of $50. These options will expire at the end of 1 year, at which time Misuraca's stock will be selling at one of two prices, $35 or $55. The risk-free rate is 5.5%. As an assistant to the firm’s treasurer, you have been asked to perform the following tasks to arrive at the...
4. Draw the PROFIT graphs for the following: Buy 1 100 call for $5 Sell 2...
4. Draw the PROFIT graphs for the following: Buy 1 100 call for $5 Sell 2 50 calls for $2 Buy 3 150 puts for $20 Sell 5 40 puts for $4
Are the profit and payoff of buying an index and buying a put the same as investing in zero-coupon bonds and buying a call?
Given that a 950-strike call has a premium of $120.405 and a 950-strike put has a premium of $51.777 and the 6-month interest rate is 2%. Suppose you buy the S&R index for $1000 and buy a 950-strike put. What are the profit and payoff for this position. Is this the same profit and payoff as investing $931.37 in a zero-coupon bonds and buying a 950-strike call.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT