Question

Prices as shown on 20 Dec 2018

Apple Inc : Current spot price: $ 150  

CALLS				PUTS
Dec	Jan	Feb	Strike Price	Dec	Jan	Feb
5	8.85	-	149	2.67	6.6	7.93
4.25	8.35	9.65	150	3.15	7	8.38
2.97	7	7.95	152	4.2	8.1	9.5
1.88	5.83	7.36	155	5.85	9.3	10.64

11.1 Construct a profit/loss for a buyer of Jan Call at 155 strike price

11.2 Construct a profit/loss for a seller of Jan Call at 155 strike price

11.3 Construct a profit/loss for a buyer of Dec Put at 149 strike price

11.4 Construct a profit/loss for a seller of Dec Put at 149 strike price

Answer 1

11.1 Buyer of Jan call @ 5.83

A	B	C	D
Stock Price on Expiry	Payoff From call	Cost of Call option	Profit/(Loss) (B-C)
140	0	5.83	-5.83
141	0	5.83	-5.83
142	0	5.83	-5.83
143	0	5.83	-5.83
144	0	5.83	-5.83
145	0	5.83	-5.83
146	0	5.83	-5.83
147	0	5.83	-5.83
148	0	5.83	-5.83
149	0	5.83	-5.83
150	0	5.83	-5.83
151	0	5.83	-5.83
152	0	5.83	-5.83
153	0	5.83	-5.83
154	0	5.83	-5.83
155	0	5.83	-5.83
156	1	5.83	-4.83
157	2	5.83	-3.83
158	3	5.83	-2.83
159	4	5.83	-1.83
160	5	5.83	-0.83
161	6	5.83	0.17
162	7	5.83	1.17
163	8	5.83	2.17
164	9	5.83	3.17
165	10	5.83	4.17
166	11	5.83	5.17
167	12	5.83	6.17
168	13	5.83	7.17
169	14	5.83	8.17
170	15	5.83	9.17

11.2 Seller of 155 Strike

A	B	C	D
Stock Price on Expiry	Payoff From call	Premium received	Profit/(Loss) (C+B)
140	0	5.83	5.83
141	0	5.83	5.83
142	0	5.83	5.83
143	0	5.83	5.83
144	0	5.83	5.83
145	0	5.83	5.83
146	0	5.83	5.83
147	0	5.83	5.83
148	0	5.83	5.83
149	0	5.83	5.83
150	0	5.83	5.83
151	0	5.83	5.83
152	0	5.83	5.83
153	0	5.83	5.83
154	0	5.83	5.83
155	0	5.83	5.83
156	-1	5.83	4.83
157	-2	5.83	3.83
158	-3	5.83	2.83
159	-4	5.83	1.83
160	-5	5.83	0.83
161	-6	5.83	-0.17
162	-7	5.83	-1.17
163	-8	5.83	-2.17
164	-9	5.83	-3.17
165	-10	5.83	-4.17
166	-11	5.83	-5.17
167	-12	5.83	-6.17
168	-13	5.83	-7.17
169	-14	5.83	-8.17
170	-15	5.83	-9.17

11.3 Buyer of December Put 149 Strike @ 2.67

A	B	C	D
Stock Price on Expiry	Payoff From put	Cost of Put option	Profit/(Loss) (B-C)
140	9	2.67	6.33
141	8	2.67	5.33
142	7	2.67	4.33
143	6	2.67	3.33
144	5	2.67	2.33
145	4	2.67	1.33
146	3	2.67	0.33
147	2	2.67	-0.67
148	1	2.67	-1.67
149	0	2.67	-2.67
150	0	2.67	-2.67
151	0	2.67	-2.67
152	0	2.67	-2.67
153	0	2.67	-2.67
154	0	2.67	-2.67
155	0	2.67	-2.67
156	0	2.67	-2.67
157	0	2.67	-2.67
158	0	2.67	-2.67
159	0	2.67	-2.67
160	0	2.67	-2.67
161	0	2.67	-2.67
162	0	2.67	-2.67
163	0	2.67	-2.67
164	0	2.67	-2.67
165	0	2.67	-2.67
166	0	2.67	-2.67
167	0	2.67	-2.67
168	0	2.67	-2.67
169	0	2.67	-2.67
170	0	2.67	-2.67

11.4 Seller of December Put 149 Strike

A	B	C	D
Stock Price on Expiry	Payoff From put	Premium received from selling put	Profit/(Loss) (B+C)
140	-9	2.67	-6.33
141	-8	2.67	-5.33
142	-7	2.67	-4.33
143	-6	2.67	-3.33
144	-5	2.67	-2.33
145	-4	2.67	-1.33
146	-3	2.67	-0.33
147	-2	2.67	0.67
148	-1	2.67	1.67
149	0	2.67	2.67
150	0	2.67	2.67
151	0	2.67	2.67
152	0	2.67	2.67
153	0	2.67	2.67
154	0	2.67	2.67
155	0	2.67	2.67
156	0	2.67	2.67
157	0	2.67	2.67
158	0	2.67	2.67
159	0	2.67	2.67
160	0	2.67	2.67
161	0	2.67	2.67
162	0	2.67	2.67
163	0	2.67	2.67
164	0	2.67	2.67
165	0	2.67	2.67
166	0	2.67	2.67
167	0	2.67	2.67
168	0	2.67	2.67
169	0	2.67	2.67
170	0	2.67	2.67