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6. You create a bull spread by buying a call with a strike price...
To apply Bull Spread strategy, an investor buys for $3 a three-month call with a strike...
To apply Bull Spread strategy, an investor buys for $3 a three-month call with a strike price of $30 and sells for $1 a three-month call with a strike price of $35. The payoff from this bull spread strategy is $5 if the stock price is above $35 and zero if it is below $30. Please consider the different stock prices at expiration date to conduct a profit analysis and draw profit diagram.
NEED HELP You create a straddle with a call and put option with the same strike...
NEED HELP
You create a straddle with a call and put option with the same strike price of $50. The price of the call option is $4 and the price of the put option is $3. If the stock price is $18 at the maturity of the options, what is the net payoff from the straddle? A. $17 ம ப ்
10. Use the options prices for Spotify in the EXCEL FILE to create a bear spread...
10. Use the options prices for Spotify in the EXCEL FILE to create a bear spread using the puts with strike prices 170 and 175. Be sure to use the appropriate bid and ask prices. a. What will be your cash flow per share when you set up the position? Show all cash flows: inflows, outflows, and net flow. Inflow Outflow Net Flow b. The maximum profit on the put bear spread is c. The minimum profit on the put...
15. A butterfly spread involves writing two call options at one striking price, buying one call...
15. A butterfly spread involves writing two call options at one striking price, buying one call option at a lower striking price, and buying one call option at a higher striking price. Suppose you did this by buying 1 of JUN 30 calls ($2.25 each), selling 2 of JUN 35 calls ($1.25), and buying 1 of JUN 40 calls ($ 0.5). How much would be your profits, if, at expiration, the price of a share of the stock is $30,...
Call options on a stock are available with strike prices of $15, $17.5 , and $20...
Call options on a stock are available with strike prices of $15, $17.5 , and $20 and expiration dates in 3 months. Their prices are $4, $2, and $0.5 , respectively. (a) How can those options be used to create a butterfly spread? 2 (b) What is the initial investment? (c) Construct a table showing how payoff and profit varies with ST in 3 month, for the butterfly spread you created. The table should looks like this: Stock Price Payoff...
2. Assume there are two Call options for Intel stock at CBOE with strike price 100...
2. Assume there are two Call options for Intel stock at CBOE with strike price 100 and 120. The current stock price for Intel is 110. Construct a Bull Spread using these options. Specify the option positions you hold. Draw the terminal payoff graph for the bull spread. (1)
6. The following table shows the premiums of European call and put options having the same...
6. The following table shows the premiums of European call and put options having the same underlying stock, the same time to expiration but different strike prices: StrikeCall Premium Put Premium $20 $23 $25 $3.59 $2.45 $1.89 $2.64 $4.36 $5.70 You use the above call and put options to construct an asymmetric butterfly spread with the following characteristics (i) The maximum payoff of 6 is attained when the stock price at expiration is 23 (ii) The payoff is strictly positive...
An investor creates a butterfly spread by trading 9-month call options with strike prices of $115,...
An investor creates a butterfly spread by trading 9-month call options with strike prices of $115, $125, and $135. The prices of the options are $20.50, $14.50, and $9.50, respectively. What is the total payoff when the stock price in 9 months is $128? (Note: Total payoff does not include initial investment) $5 $7 $0 $10
The goal of this project is to examine option trading strategies. The project requires you to...
The goal of this project is to examine option trading strategies. The project requires you to work in Excel with the provided spreadsheet. A) Bull Spread Payoff Long call option K1 = Short call option K2 = Stock Price (ST) Total Payoff $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 A) Consider buying a call option with a strike of $20 and a selling call option with strike of $30. Fill in the table for...
g) European call with a strike price of $40 costs $7. European put with the same...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
NEED HELP
You create a straddle with a call and put option with the same strike price of $50. The price of the call option is $4 and the price of the put option is $3. If the stock price is $18 at the maturity of the options, what is the net payoff from the straddle? A. $17 ம ப ்
10. Use the options prices for Spotify in the EXCEL FILE to create a bear spread using the puts with strike prices 170 and 175. Be sure to use the appropriate bid and ask prices. a. What will be your cash flow per share when you set up the position? Show all cash flows: inflows, outflows, and net flow. Inflow Outflow Net Flow b. The maximum profit on the put bear spread is c. The minimum profit on the put...
2. Assume there are two Call options for Intel stock at CBOE with strike price 100 and 120. The current stock price for Intel is 110. Construct a Bull Spread using these options. Specify the option positions you hold. Draw the terminal payoff graph for the bull spread. (1)
6. The following table shows the premiums of European call and put options having the same underlying stock, the same time to expiration but different strike prices: StrikeCall Premium Put Premium $20 $23 $25 $3.59 $2.45 $1.89 $2.64 $4.36 $5.70 You use the above call and put options to construct an asymmetric butterfly spread with the following characteristics (i) The maximum payoff of 6 is attained when the stock price at expiration is 23 (ii) The payoff is strictly positive...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
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