Suppose you buy a May expiration call option on 100 shares (@ $3.80) with the excise...
Suppose you buy a May expiration call option on 100 shares (@ $3.80)
with the excise price of $140.
a.) If the stock price in May is $152, will you exercise your call? (Yes or No)
What is the net profit/loss on your position?
What is the rate of return on your position?
b.) What if you had bought an May put option on 100 shares with exercise price $140 at a price of ($2.71) instead? Would you exercise the put at a stock price of $140? Stock price stays the same ($152).
What is the net profit/loss on your position?
What is the rate of return on your position?
Homework Answers
Add Answer to:
Suppose you buy a May expiration call option on 100
shares (@ $3.80)
with the excise...
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June...
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June expiration call option on 20 shares with the excise price of $135. a-1. If the stock price in June is $150, will you exercise your call? O Yes Ο Νο a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 139 a-3. What is the rate of return on your position? (Negative value should...
1. (15 points) Suppose you buy a November expiration call option with exercise price $21. a....
1. (15 points) Suppose you buy a November expiration call option with exercise price $21. a. Suppose the stock price in November is $21.75, will you exercise your call? What is the profit on your (5 points) b. What if you had bought the November call with exercise price $222 (5 points) c. What if you had bought a November put with exercise price $22? (5 points) position?
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with...
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with exercise price $172, and the price of the call option is $8.93. You also write a January expiration IBM put option with exercise price $167, the price of the put option is $10.85. Instructions: for parts a, b, and c, enter your answer as a decimal rounded to the nearest cent. a. What will be the profit/loss on this position if IBM is selling...
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with...
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with exercise price $170, and the price of the call option is $8.93. You also write a January expiration IBM put option with exercise price $165, the price of the put option is $10.85. Instructions: for parts a, b, and c, enter your answer as a decimal rounded to the nearest cent. a. What will be the profit/loss on this position if IBM is selling...
Refer to the stock options on Apple in the Figure 2.10. Suppose you buy a September...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210....
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
Suppose you buy a June expiration call option on 30 shares of Apple stock with the...
Suppose you buy a June expiration call option on 30 shares of Apple stock with the exercise price of $240. If the stock price is $256 in June (just before expiration) – would you exercise this option? A. Yes B. No C. Impossible to determine D. You would have to wait until after the expiration date
1) A call option is priced at $7 with an exercise price of $100 and an...
1) A call option is priced at $7 with an exercise price of $100 and an underlying stock price of $98. If the stock price at expiry is $102 determine the following: o Option value for a long position o Profit for a long position 2) A put option is priced at $4 with an exercise price of $60 and an underlying price of $62. Determine the following: o Option value for a long position if the stock price at...
You bought Stock A at a purchase price of: Call option strike price: Option expiration date:...
You bought Stock A at a purchase price of: Call option strike price: Option expiration date: Price of call option: $25 $35 June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 A. Profit/Loss on stock if sell now B. Profit/Loss on call option if sell now All other things being equal, would you expect the price of the call option to be higher or lower than $5 for a stock that is identical to Stock...
You have taken a long position in a call option on IBM common stock. The option...
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...
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June expiration call option on 20 shares with the excise price of $135. a-1. If the stock price in June is $150, will you exercise your call? O Yes Ο Νο a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 139 a-3. What is the rate of return on your position? (Negative value should...
1. (15 points) Suppose you buy a November expiration call option with exercise price $21. a. Suppose the stock price in November is $21.75, will you exercise your call? What is the profit on your (5 points) b. What if you had bought the November call with exercise price $222 (5 points) c. What if you had bought a November put with exercise price $22? (5 points) position?
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with exercise price $170, and the price of the call option is $8.93. You also write a January expiration IBM put option with exercise price $165, the price of the put option is $10.85. Instructions: for parts a, b, and c, enter your answer as a decimal rounded to the nearest cent. a. What will be the profit/loss on this position if IBM is selling...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
1) A call option is priced at $7 with an exercise price of $100 and an underlying stock price of $98. If the stock price at expiry is $102 determine the following: o Option value for a long position o Profit for a long position 2) A put option is priced at $4 with an exercise price of $60 and an underlying price of $62. Determine the following: o Option value for a long position if the stock price at...
You bought Stock A at a purchase price of: Call option strike price: Option expiration date: Price of call option: $25 $35 June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 A. Profit/Loss on stock if sell now B. Profit/Loss on call option if sell now All other things being equal, would you expect the price of the call option to be higher or lower than $5 for a stock that is identical to Stock...
Most questions answered within 3 hours.
-
Consider a different car. Its initial position at time 5 s is
5m, and it moves...
asked 30 seconds ago -
An electric power station that operates at 25 kV and uses a 20:1
step-up ideal transformer...
asked 2 minutes ago -
Discuss the sales orders process module(s) in the Enterprise
Resource Planning system. How does it contribute...
asked 18 minutes ago -
Which of the eight traits/ skills associated with being an
effective project manager is the most...
asked 2 minutes ago -
In the Metric System, the basic unit of measurement for length
is ___
In the Metric...
asked 9 minutes ago -
A spatially uniform electric field varies in time according
to E = Eo + 3000 t,...
asked 9 minutes ago -
A sample of C3H8 has 1.60×1024 H atoms.
How many carbon atoms does the sample contain?...
asked 15 minutes ago -
The position in an object as a function of time is given as ?
(?) =...
asked 19 minutes ago -
Design a class for python named PersonData with the following
member variables:
lastName
firstName
address
city...
asked 32 minutes ago -
How does use of the risk/need/responsivity model impact
effective rehabilitation services?
asked 36 minutes ago -
Your rich uncle has just given you a high school graduation
present of $900,000. The present,...
asked 39 minutes ago -
1=Write a program in C to get 16-bit data from Port-D and send
it to ports...
asked 37 minutes ago