ZuoTi.Pro
Question

*Assuming you sold a December 28 put option-i.e.--$28.00 strike price (X)--on Twitter (Symbol: TWTR) for a $3.35 premium what
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Put srike price (X) = $28

Put premium (P) = $3.35

Breakeven stock price of Put option:

= Y-P

= 28 -335

= $24.65

This is a Bearish Position

A investor Long (Buy) option when he is expecting the underlying stock's price to fall, Thus, a Long Put is a Bearish position.

Put option is a fiancial dervative, which gives a right not obligation to sell underlying stock at pre-determined price (i.e strike price) on a future maturity date.

Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

0 0
Add a comment
Know the answer?
Add Answer to:
*Assuming you sold a December 28 put option-i.e.--$28.00 strike price (X)--on Twitter (Symbol: TWTR) for a...
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

  • You are trying to value a one-period call option on Twitter with a strike price of...

    You are trying to value a one-period call option on Twitter with a strike price of $32. The current risk-free rate is 10%. Next year, the price of Twtr will be $38 if the economy is good or $22 if the economy is bad. Unfortunately, you don’t know the current stock price for Twtr. However, you know that a put option on the stock with a strike price of $30 has a current price of $2.80. What is the value...

  • Buying a put option and selling a call option are both considered a way of expressing...

    Buying a put option and selling a call option are both considered a way of expressing a bearish view on a stock (i.e., that its price will decline). Draw the hockey-sticks for both buying a put and selling a call in terms of the stock price at expiry S(T), the strike (X), and the premium (C/P). Be sure to label the graphs including breakeven points and upside/downside

  • 1. There is a put option for Euros with a strike price of $1.22 and a...

    1. There is a put option for Euros with a strike price of $1.22 and a premium of $.06. There is another put option for Euros with a strike price of $1.16   and a premium of $0.03. You are slightly pessimistic about the Euro and decide to utilize a bear spread using these two put options. a) Please draw the contingency graph and identify the maximum gain and loss as well as the breakeven point. b) Assuming the resulting spot...

  • 1. A put option has a strike price of $4.78 and a premium of $0.01. At...

    1. A put option has a strike price of $4.78 and a premium of $0.01. At expiration, the price of the underlying is $4.81. What is the breakeven price of the option? Ignoring the premium, what is the profit or loss to the option holder at expiration.

  • Suppose that you have taken a long position on a put option. The strike price is...

    Suppose that you have taken a long position on a put option. The strike price is $125, and the option premium / price is $10. When the option expires, the value of the underlying asset is $90. What is your pay-off and profit / loss?

  • Suppose that you have taken a long position on a put option. The strike price is...

    Suppose that you have taken a long position on a put option. The strike price is $125, and the option premium / price is $10. When the option expires, the value of the underlying asset is $90. What is your pay-off and profit / loss? please show your work

  • 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...

  • Problem 5: You enter into the following trade.  Write a put option with a strike...

    Problem 5: You enter into the following trade.  Write a put option with a strike price of 30  Write a call option with a strike price of 50  Both the call and put option are written on the same underlying and have the same expiration date. Problem 5: You enter into the following trade. • Write a put option with a strike price of 30 Write a call option with a strike price of 50 • Both...

  • 1. You are the buyer of a put option which has a put premium of $2.30. The strike price is $83 and the underlying stock...

    1. You are the buyer of a put option which has a put premium of $2.30. The strike price is $83 and the underlying stock price is $82.50. What is your profit or loss? a. Loss $230 b. Gain $50 c. Gain $230 d. Loss $180 e. None of the above. 2. You are the seller of a put option. The put premium is $5.50 and the exercise price is $105. If the underlying stock price is $110, what is...

  • Bluefish has a put option that trades with a strike price of $76. The put option...

    Bluefish has a put option that trades with a strike price of $76. The put option premium is $11. Determine the profit/loss on WRITING one Bluefish put option if at the option's expiration the stock price is $51. Place your answer with dollars and cents without a dollar sign. Enter negative answers with a "minus" sign. For example, if your answer is negative two dollars and seventy five cents, then enter -2.75.

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