Then Total profit = ($78 - $84) + $1.45 = - ($4.55) per share
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The option has an exercise price of $87, and Walmart’s stock currently trades at $85. The option premium is $1.25 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $83 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price...
You have written a call option on Walmart common stock. The option has an exercise price of $80, and Walmart’s stock currently trades at $78. The option premium is $1.55 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $76 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price...
You have written a put option on Diebold Inc. common stock. The option has an exercise price of $42 and Diebold's stock currently trades at $44.50. The option premium is $.75 per contract. a. What is your net profit if Diebold's stock price increases to $46 and stays there until the option expires? b. What is your net profit on the option if Diebold's stock price decreases to $39 at expiration of the option and the option holder exercises the...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $148 and IBM's stock currently trades at $153. The option premium is $7 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit on the option if IBM’s stock price increases to $163 at expiration of the option and you exercise the option? c. What is...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $144 and IBM's stock currently trades at $148. The option premium is $6 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit on the option if IBM’s stock price increases to $158 at expiration of the option and you exercise the option? c. What is...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $147 and IBM's stock currently trades at $152. The option premium is $6 per contract. a. How much of the option premium is due to intrinsic value versus time value? Option Premium Intrinsic value $ Time value b. What is your net profit on the option if IBM’s stock price increases to $162 at expiration of the option and...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $142 and IBM's stock currently trades at $148. The option premium is $7 per contract. a. How much of the option premium is due to intrinsic value versus time value?b. What is your net profit on the option if IBM’s stock price increases to $158 at expiration of the option and you exercise the option?c. What is your net profit if IBM’s stock...
You have purchased a put option on Pfizer common stock. The option has an exercise price of $45 and Pfizer's stock currently trades at $47. The option premium is $0.60 per contract. a. What is your net profit on the option if Pfizer's stock price does not change over the life of the option? b. What is your net profit on the option if Pfizer's stock price falls to $41 and you exercise the option? (For all requirements, negative amounts...
You have purchased a put option on Pfizer common stock. The option has an exercise price of $53 and Pfizer's stock currently trades at $55. The option premium is $0.80 per contract. a. What is your net profit on the option if Pfizer's stock price does not change over the life of the option? b. What is your net profit on the option if Pfizer's stock price falls to $50 and you exercise the option? (For all requirements, negative amounts...
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...