Assume you sold a put on XYZ with a 17 strike price and a July expiration....
Assume you sold a put on XYZ with a 17 strike price and a July expiration. At the time, XYZ was trading at $17.35/shr. The put earned $2.55. Close to expiration, the put traded down below $1 as the shares contiuned to trade above $17. You elected not to buy it back, and planned on letting it expire worthless. However, in July just beofre expiration date of your put option, XYZ shares tanked based on the announcement of an SEC investigation. Upon expiration date, you were assigned 100 shares of XYZ at 17. It closed that same day at $15.75. Based upon the totalitly of your option sale and assignment, are you at profit or loss in your new postion in XYZ?
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Assume you sold a put on XYZ with a 17 strike price and a July
expiration....
You purchase a European put option on XYZ stock with strike price 50. What is the...
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
Assume you have shorted a put option on Ford stock with a strike price of S8....
Assume you have shorted a put option on Ford stock with a strike price of S8. The option will expire in exactly six months' time. When you sold (wrote) the put, you received $3. b. If the stock is trading at S21 in six months, what will you owe? What will your profit be? c. Draw a payof diagram showing the amount you owe at expiration as a function of the stock price at expiration. d. Redo (c), but instead...
A put option and a call option on a stock have the same expiration date and the same exercise (or strike price). Both options expire in 6 months. Assume that put-call parity holds and interest rate is...
A put option and a call option on a stock have the same expiration date and the same exercise (or strike price). Both options expire in 6 months. Assume that put-call parity holds and interest rate is positive. If both call and put options have the same price, which of the following is true? A) Put option is in-the-money. B) Call option is in-the-money. C) Both call and put options are in-the-money. D) Both call and put options are out-of-the-money.
You own a put option on Ford stock with a strike price of $14. The option...
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
You own a put option on Ford stock with a strike price of $11. The option...
You own a put option on Ford stock with a strike price of $11. The option will expire in exactly six months' time. When you bought the put, its oost to you was $2. The option will expire in exactly six months' time. a. If the stock is trading at $7 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $20 in six...
Microsoft (MSFT) + IMSETI Underlying stock price = $71.75 Expiration Strike Call Put June 16, 2017...
Microsoft (MSFT) + IMSETI Underlying stock price = $71.75 Expiration Strike Call Put June 16, 2017 70 2.02 0.24 June 16, 2017 72 0.67 0.90 June 16, 2017 74 0.132.37 70 July 7, 2017 July 7, 2017 July 7, 2017 72 2.400.58 1.15 1.32 0.42 2.59 74 Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July...
A call option on a stock with a strike price of $60 costs $8. A put...
A call option on a stock with a strike price of $60 costs $8. A put option on the same stock with the same strike price costs $6. They both expire in 1 year. (a) How can these two options be used to create a straddle? (b) What is the initial investment? (c) Construct a table showing how the payoff and profit varies with ST in 1 year, for the straddle that you constructed. Whenever you need to refer to...
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 bought Stock A at a purchase price of: Put option strike price: $25 $15 Option...
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
Shares of XYZ are currently trading at $19.29 per share. You open a long straddle position...
Shares of XYZ are currently trading at $19.29 per share. You open a long straddle position to capture any potential volatility from the upcoming earning announcement. You long a $0.92 call option with a strike price of $19.00. You long a $0.62 put option with a strike price of $19.00. If at maturity, XYZ shares are trading at $15.00 per share, what is the final value of your long straddle position (on a per share basis)?
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
Assume you have shorted a put option on Ford stock with a strike price of S8. The option will expire in exactly six months' time. When you sold (wrote) the put, you received $3. b. If the stock is trading at S21 in six months, what will you owe? What will your profit be? c. Draw a payof diagram showing the amount you owe at expiration as a function of the stock price at expiration. d. Redo (c), but instead...
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
You own a put option on Ford stock with a strike price of $11. The option will expire in exactly six months' time. When you bought the put, its oost to you was $2. The option will expire in exactly six months' time. a. If the stock is trading at $7 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $20 in six...
Microsoft (MSFT) + IMSETI Underlying stock price = $71.75 Expiration Strike Call Put June 16, 2017 70 2.02 0.24 June 16, 2017 72 0.67 0.90 June 16, 2017 74 0.132.37 70 July 7, 2017 July 7, 2017 July 7, 2017 72 2.400.58 1.15 1.32 0.42 2.59 74 Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July...
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 bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
Shares of XYZ are currently trading at $19.29 per share. You open a long straddle position to capture any potential volatility from the upcoming earning announcement. You long a $0.92 call option with a strike price of $19.00. You long a $0.62 put option with a strike price of $19.00. If at maturity, XYZ shares are trading at $15.00 per share, what is the final value of your long straddle position (on a per share basis)?
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