ZuoTi.Pro
Question

Suppose you are given the following information: Current Price of the GPRO stock: Strike Price of a 1 year call option: Marke

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1.
Buyer of call option can gain unlimited

2.
Seller of call option can lose unlimited

3.
Buyer of put option can lose maximum of premium=3.08

4.
=9-4.30=4.70

5.
=MAX(expiry price-strike price,0)-call premium
=MAX(9-7,0)-0.49
=1.51


0 0
Add a comment
Know the answer?
Add Answer to:
Suppose you are given the following information: Current Price of the GPRO stock: Strike Price of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The current market price of a share of Disney stock is $30. If a call option...

    The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably. The maximum loss for a writer of a put option on a stock is unlimited. equal to the exercise price. equal...

  • An investor purchases a stock for $38 and a put for $0.50 with a strike price...

    An investor purchases a stock for $38 and a put for $0.50 with a strike price of $35. The investor sells a call for $0.50 with a strike price of $40. What is the maximum profit and loss for this position? (Loss amount should be indicated by a minus sign.) Maximum profit Maximum loss

  • The premium of a call with a strike price of $35 is $3.0 per share, and...

    The premium of a call with a strike price of $35 is $3.0 per share, and the premium of a put option with a strike price of $34 is $2.0 per share. The maximum loss per-share to the writer of the put will be __________, and the maximum gain per-share to the writer of the call will be _________. A. $33, $31.50 B. $36, $3.0 C. $32, $3.0 D. $34, $35

  • A call option with a strike price of $50 on a stock selling at 60 costs...

    A call option with a strike price of $50 on a stock selling at 60 costs $12.5. The call option's intrinsic value is 1) 10, 12.5 2) 12.5, 10 3) 50, 12.5 4) 10, 2.5 5) None of the above 8. and time value is You purchase one share of IBM July call option. The exercise price is 120 and the option premium is $5. You hold the option until the expiration date when IBM stock sells for $123 per...

  • Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price...

    Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price W3250 V385 V105 V3000 Q16. An investor undertakes a covered call strategy, executing both the 6 points stock and three month options trades at current market prices shown in the table above. The investor plans on selling the stock when the option expires in three months time. Calculate the total profit and loss from these trades if the stock price in three months time...

  • An investor buys a 84 strike put option contract with a premium of 4.30 and writes...

    An investor buys a 84 strike put option contract with a premium of 4.30 and writes (sells) an 80 strike put option contract for 2.20. What is the maximum profit per share? Maximum loss per share?

  • You establish a straddle on Fincorp using September call and put options with a strike price of $80. The call premium i...

    You establish a straddle on Fincorp using September call and put options with a strike price of $80. The call premium is $7.00 and the put premium is $8.50. a. What is the most you can lose on this position? (Input the amount as positive value. Round your answer to 2 decimal places.) Maximum loss b. What will be your profit or loss if Fincorp is selling for $88 in September? (Input the amount as positive value. Round your answer...

  • Options trade on the common stock of Taz, Inc. that have a strike price of $50.00...

    Options trade on the common stock of Taz, Inc. that have a strike price of $50.00 and a premium of $2.50. In each of the next four parts, calculate the net profit (or loss) on the option position, where net profit includes the premium in the calculation. Note: Negative responses should be placed with a preceding negative sign (e.g. -4.50) and not with parentheses (e.g. (4.50)). Part 1: Calculate the net profit or loss from BUYING a CALL option on...

  • A 1-year European put option on a stock with strike price of $50 is quoted as...

    A 1-year European put option on a stock with strike price of $50 is quoted as $7; a 1-year European call option on the same stock with strike price $30 is quoted as $5. Suppose you long one put and short one call (one option is on 100 share). a) Draw the payoff diagram for your put position and call position. (5 points) b) After 1-year, stock price turns out to be $45. What is your total payoff? What is...

  • (5 pts) Suppose I sell 5 PUT option contracts on Home Depot with a strike price...

    (5 pts) Suppose I sell 5 PUT option contracts on Home Depot with a strike price of $180.00 and an option premium of $19. The stock price is $209.45 when I sell the put and moves between $199.24 and $215.43 during the time up to expiration. What is my maximum profit or loss on this? (5 pts) Using the date in question 13, what would my maximum profit or loss be if the price of Home Depot stock moved from...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT