Using excel, graph the value of your portfolio as a function of the relevant stock price....
Using excel, graph the value of your portfolio as a function of the relevant stock price. Graph for stock prices between 100 and 160. Assume today is the last day for exercising your options. (Your graph should include at least 50 data points and a table explaining each data point.)
- You are short a call at 120, and long a put at 130.
Homework Answers
Call will have payoff when the price is more than 120, this payoff shall be negative as the call is short.
Payoff on short call=-max(0,Stock price-120)
Put shall have payoff below 130.
Payoff on put=max(0,130-Stock price)
The payoff are as below:
| Stock price | Payoff Short Call | Payoff long put | Total Payoff | |
| $ 100.00 | $ - | $ 30.00 | $ 30.00 | |
| $ 101.00 | $ - | $ 29.00 | $ 29.00 | |
| $ 102.00 | $ - | $ 28.00 | $ 28.00 | |
| $ 103.00 | $ - | $ 27.00 | $ 27.00 | |
| $ 104.00 | $ - | $ 26.00 | $ 26.00 | |
| $ 105.00 | $ - | $ 25.00 | $ 25.00 | |
| $ 106.00 | $ - | $ 24.00 | $ 24.00 | |
| $ 107.00 | $ - | $ 23.00 | $ 23.00 | |
| $ 108.00 | $ - | $ 22.00 | $ 22.00 | |
| $ 109.00 | $ - | $ 21.00 | $ 21.00 | |
| $ 110.00 | $ - | $ 20.00 | $ 20.00 | |
| $ 111.00 | $ - | $ 19.00 | $ 19.00 | |
| $ 112.00 | $ - | $ 18.00 | $ 18.00 | |
| $ 113.00 | $ - | $ 17.00 | $ 17.00 | |
| $ 114.00 | $ - | $ 16.00 | $ 16.00 | |
| $ 115.00 | $ - | $ 15.00 | $ 15.00 | |
| $ 116.00 | $ - | $ 14.00 | $ 14.00 | |
| $ 117.00 | $ - | $ 13.00 | $ 13.00 | |
| $ 118.00 | $ - | $ 12.00 | $ 12.00 | |
| $ 119.00 | $ - | $ 11.00 | $ 11.00 | |
| $ 120.00 | $ - | $ 10.00 | $ 10.00 | |
| $ 121.00 | $ (1.00) | $ 9.00 | $ 8.00 | |
| $ 122.00 | $ (2.00) | $ 8.00 | $ 6.00 | |
| $ 123.00 | $ (3.00) | $ 7.00 | $ 4.00 | |
| $ 124.00 | $ (4.00) | $ 6.00 | $ 2.00 | |
| $ 125.00 | $ (5.00) | $ 5.00 | $ - | |
| $ 126.00 | $ (6.00) | $ 4.00 | $ (2.00) | |
| $ 127.00 | $ (7.00) | $ 3.00 | $ (4.00) | |
| $ 128.00 | $ (8.00) | $ 2.00 | $ (6.00) | |
| $ 129.00 | $ (9.00) | $ 1.00 | $ (8.00) | |
| $ 130.00 | $ (10.00) | $ - | $ (10.00) | |
| $ 131.00 | $ (11.00) | $ - | $ (11.00) | |
| $ 132.00 | $ (12.00) | $ - | $ (12.00) | |
| $ 133.00 | $ (13.00) | $ - | $ (13.00) | |
| $ 134.00 | $ (14.00) | $ - | $ (14.00) | |
| $ 135.00 | $ (15.00) | $ - | $ (15.00) | |
| $ 136.00 | $ (16.00) | $ - | $ (16.00) | |
| $ 137.00 | $ (17.00) | $ - | $ (17.00) | |
| $ 138.00 | $ (18.00) | $ - | $ (18.00) | |
| $ 139.00 | $ (19.00) | $ - | $ (19.00) | |
| $ 140.00 | $ (20.00) | $ - | $ (20.00) | |
| $ 141.00 | $ (21.00) | $ - | $ (21.00) | |
| $ 142.00 | $ (22.00) | $ - | $ (22.00) | |
| $ 143.00 | $ (23.00) | $ - | $ (23.00) | |
| $ 144.00 | $ (24.00) | $ - | $ (24.00) | |
| $ 145.00 | $ (25.00) | $ - | $ (25.00) | |
| $ 146.00 | $ (26.00) | $ - | $ (26.00) | |
| $ 147.00 | $ (27.00) | $ - | $ (27.00) | |
| $ 148.00 | $ (28.00) | $ - | $ (28.00) | |
| $ 149.00 | $ (29.00) | $ - | $ (29.00) | |
| $ 150.00 | $ (30.00) | $ - | $ (30.00) | |
| $ 151.00 | $ (31.00) | $ - | $ (31.00) | |
| $ 152.00 | $ (32.00) | $ - | $ (32.00) | |
| $ 153.00 | $ (33.00) | $ - | $ (33.00) | |
| $ 154.00 | $ (34.00) | $ - | $ (34.00) | |
| $ 155.00 | $ (35.00) | $ - | $ (35.00) | |
| $ 156.00 | $ (36.00) | $ - | $ (36.00) | |
| $ 157.00 | $ (37.00) | $ - | $ (37.00) | |
| $ 158.00 | $ (38.00) | $ - | $ (38.00) | |
| $ 159.00 | $ (39.00) | $ - | $ (39.00) | |
| $ 160.00 | $ (40.00) | $ - | $ (40.00) |
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