You have taken a protective put strategy by purchasing 100 shares of ANW stock at $20 per share and 1 ANW put option contract at a premium of $1. The put option contract has a strike price of $15. What is the maximum potential loss for this strategy?
A)$600
B)100
C)500
D)800
You have taken a protective put strategy by purchasing 100 shares of ANW stock at $20...
Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a share. You want to ensure that you do not lose more than $200 a share. Which of the following option strategies would allow you to do this? A. A covered call B. A naked call C. A protective put D. You cannot ensure that you will not have losses with stocks Suppose I buy 100 shares of AMD and want to limit my losses...
You buy a put option on 100 shares of stock. The put has a premium (per share) of $0.42 and a strike/exercise price of $5.10. The stock currently has a price of $5.63 per share. On the day that the option expires, the stock is selling for $5.02. What ends up being your net payoff on this position?
An investor creates a covered call position by purchasing 100 shares of the Tesla stock at a price of $340 per share and selling 100 call options on the Tesla stock with a strike price $340 per share. The premium of the option is $15 per share. At which stock price at the maturity of the option will the investor break even? Please provide your answer in unit of dollars, rounded to the nearest cent.
Assume you just purchased 100 shares of Apple stocks at $580. You are worrying that the competition from other tablet PC producers will have a negative impact on Apple stock prices in 1 month. Generally speaking, you are still quite bullish on Apple stock. (i) In order to hedge against this downside risk, you establish a protective put position by buying a put option contract with around 1-month maturity on Apple stock (note: 1 contract consists of 100 options). Each put option...
I need help Suppose you own 100,000 shares of a stock selling for $20 a share. You also purchased a PUT option for each share of stock for $4 per share. Strike price (exercise price) is $20. At option expiration, the stock is selling for $15. What should you do regarding the put? Sell the put Exercise the put Buy more put options to offset the loss on the stock Let the put option expire unexercised The transaction above is...
You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice $300 loss $300 profit $500 profit $800 profit
1.You write a short put option giving the purchaser the right to sell 100 shares of Rothbard Corporation for a premium of $1,300. The strike price of the option is $20 and the final stock price is $85. What is your profit or loss? 2.You write a short call option giving the purchaser the right to buy 100 shares of Garrett Corporation for a premium of $1,600. The strike price of the option is $35 and the final stock price...
You bought a stock at $67 and want to use a protective put strategy that consists in buying a put to protect against losses on the stock position. Puts with a strike K=62 are quoted with a bid of $1.08 and an ask of $1.21. What is the maximum loss on the entire strategy? {Enter the positive number of the loss (do not use a negative sign in your answer) with 2 decimals. For example, if you compute the profit/loss...
You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice A) $500 profit B) $300 profit C) $800 profit D) $300 loss
13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike price of $37 per share, option price of $2 per share, and a three-month term. Alison probably bought the option because she What did Alison pay to buy the option? $| sees a bright future for the company and its stock...