Suppose that a December call option on a stock with a strike price of $100 costs $12 and is held until maturity. Please the following three questions.
Suppose that a December call option on a stock with a strike price of $100 costs $12 and is held until maturity. Please the following three questions.
The holder of the call option will gain if the price of the stock is above $112 on Maturity. This is because the payoff to the holder of the option is, in these circumstances, greater than the $12 as premium paid for the call option. (In the Money)
The option will be exercised if the price of the stock is above $100.00 in March. Though, if the stock price is between $100 and $112 the option is exercised, but the holder of the option takes a loss overall. (In the Money)
The break even price is the market price that an underlying asset must reach for an option buyer to avoid a loss if they exercise the option. The break even price for the call option is the $100 strike price plus the $12 call premium, or $112. (At the Money)
Suppose that a December call option on a stock with a strike price of $100 costs...
Suppose that March call option in a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the options depends on the stock price at the maturity of the option.
Important Red All Tags... 1.13. Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option
Suppose a June put option on a stock with a strike price of $60 costs $4 and is held until June. Under what circumstance will the holder of the option make again? Under what circumstance will the option be exercised? Draw a diagram showing how the profit on a short position in the option depends on the stock price at maturity of the option. NB: show data for the graph, please. i need to know how it was gotten so...
An investor sells a European call on a share for $13. The strike price is $36. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investor's profit with the stock price at the maturity of the option.
An investor sells a European call on a share for S3 The stock price is $26 and the strike price is $29. Under what circumstanc 4- es does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investor's profit with the stock price at the maturity of the option.
(i) The current stock price is 100. The call option premium with a strike price 100 is 8. The effective risk-free interest rate is 2%. The stock pays no dividend. What is the price of a put option with strike price 100? (Both options mature in 3 months.) (ii) The 3-month forward price is 50. The put option premium with a strike price 52 is 3 and the put option matures in 3 months. The risk-free interest rate is 4%...
1. Apple call options strike $330.00 is trading at $127.50 today. Under what circumstances does the investor of a long call make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investors profit with the stock price at the maturity of the option. hint: K = 330 C=127.50 Long call profit: St-K-c>0 , 2. Apple put options strike $460 is trading at $6.35 today. Under what circumstances does the investor make...
A stock price is currently $100. A call option on this stock with a strike price of $100 and one year to maturity costs $13.61. The continuous-time interest rate is 5%. By using a one-step binomial tree, estimate the expected volatility level (σ) for the stock. Assume that u and d are modeled as below. ( Excel's Goal Seek will help solving this and will be much appreciated to be posted to see how it has been used to solve this problem, thanks)...
The current stock price is 100. The call option premium with a strike price 100 is 8. The effective risk-free interest rate is 2%. The stock pays no dividend. What is the price of a put option with strike price 100? (Both options mature in 3 months.)
Show work please You purchase one (1) call option with strike price 50 for $ 9 and write three (3) call options with strike 60 for $ 3. 1) Draw the payoff and profit table for this strategy at maturity. 2) When do you break-even (profit=0) at maturity? 3) What are your anticipations about the stock at maturity (when do you make money)? 4) Assume that you may purchase calls with strike price 70 for $ 1. How many options...