Show profit (or loss) from buying a put option for a contract size of 62500 euro....

Show profit (or loss) from buying a put option for a contract size of 62500 euro. Assume exercise price is $1.10 and option premium is $0.03. Also list cash inflows and outflows at $1.08, $1.10, $1.12, and at $1.14. What is the break-even price?

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jeff jeffy answered 1 year ago

Consider the following option contract on the Euro: It is a put option for 125,000 euros,...

Consider the following option contract on the Euro: It is a put option for 125,000 euros, with settlement prices in terms of US dollars per one euro (i.e., if exercised, euros will be exchanged for the appropriate number of dollars) The strike price is 1.2000 dollars per euro, and the premium is 0.0300 dollars per euro. Suppose a trader entered a long position by buying seven of these put option contracts. What would be the trader’s profit or loss if...

Consider the following option contract on the Euro: It is a put option for 125,000 euros,...

Consider the following option contract on the Euro: It is a put option for 125,000 euros, with settlement prices in terms of US dollars per one euro (i.e., if exercised, euros will be exchanged for the appropriate number of dollars) The strike price is 1.2000 dollars per euro, and the premium is 0.0300 dollars per euro. (a) Suppose a trader entered a long position by buying seven of these put option contracts. What would be the trader’s profit or loss...

5. You buy a put option on the £ for $.021/£. The option contract size is...

5. You buy a put option on the £ for $.021/£. The option contract size is £500,000. The exercise price is $1.45/£. When the option matures, the spot rate is $1.4055/£. What is your overall profit/loss on the put option?

Calculate the profit/loss for the seller of the put option when the strike is .36; spot...

Calculate the profit/loss for the seller of the put option when the strike is .36; spot is .34 and premium is .01.

A protective put position is formed by buying the stock and buying a put option on...

A protective put position is formed by buying the stock and buying a put option on the same stock. Given the following quotations from April 25, 2017 for Amazon stock and an Amazon put option, answer the questions below. Closing price of Amazon stock = $832 per share. Option strike price = $800 Closing price of the put option = $18.30 Put option expiration date: June 16, 2017 a) Plot the payoff and profit diagrams for the protective put position...

What is the total profit/loss for 9 contracts on a $1,310 put option on Alphabet Inc....

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Consider the following option contract on the Euro: It is a call option for 125,000 euros,...

Consider the following option contract on the Euro: It is a call option for 125,000 euros, but here the settlement prices are in terms of Swiss franc per one euro (i.e., if exercised, €125,000 will be delivered in exchange for the appropriate number of francs) The strike price is 1.07 franc per euro, and the premium is 0.0060 franc per euro. Suppose a trader writes one of these call option contracts. What would be the trader’s profit or loss if...

Consider the following option contract on the Euro: It is a call option for 125,000 euros,...

Consider the following option contract on the Euro: It is a call option for 125,000 euros, with settlement prices in terms of US dollars per one euro (i.e., if exercised, €125,000 will be delivered in exchange for the appropriate number of dollars) The strike price is 1.2000 dollars per euro, and the premium is 0.0150 dollars per euro. Suppose a trader writes ten of these call option contracts. What would be the trader’s profit or loss if the spot rate...

Explain how buying a put option is like insurance?

Graph the pay-off and profit from writting a European put option with option price (premium)=$10, strike...

Graph the pay-off and profit from writting a European put option with option price (premium)=$10, strike price=$50. Also calculate the intrinsic value of this option if the stock price is $45

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Show profit (or loss) from buying a put option for a contract size of 62500 euro....

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Consider the following option contract on the Euro: It is a put option for 125,000 euros,...

Consider the following option contract on the Euro: It is a put option for 125,000 euros,...

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