Draw the payoff diagram for owning (buying) a call and a put option with same strike price X.
List some examples and explain it.
Position | Buy | ||||||||||
Option Type | call | ||||||||||
Exercise Price | $40.00 | ||||||||||
Option Price | $5.00 | ||||||||||
Stock Price At Maturity | $0.00 | $8.00 | $16.00 | $24.00 | $32.00 | $40.00 | $48.00 | $56.00 | $64.00 | $72.00 | $80.00 |
Option Payoff | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $8.00 | $16.00 | $24.00 | $32.00 | $40.00 |
Option Profit | -$5.00 | -$5.00 | -$5.00 | -$5.00 | -$5.00 | -$5.00 | $3.00 | $11.00 | $19.00 | $27.00 | $35.00 |
Position | Buy | ||||||||||
Option Type | Put | ||||||||||
Exercise Price | $40.00 | ||||||||||
Option Price | $5.00 | ||||||||||
Stock Price At Maturity | $0.00 | $8.00 | $16.00 | $24.00 | $32.00 | $40.00 | $48.00 | $56.00 | $64.00 | $72.00 | $80.00 |
Option Payoff | $40.00 | $32.00 | $24.00 | $16.00 | $8.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Option Profit | $35.00 | $27.00 | $19.00 | $11.00 | $3.00 | -$5.00 | -$5.00 | -$5.00 | -$5.00 | -$5.00 | -$5.00 |
Draw the payoff diagram for owning (buying) a call and a put option with same strike...
ABC. Draw the payoff diagrams of buying and selling a put option and call option. Which has the highest exposure in terms of loss?
Consider buying a call option with a strike of $20 and selling a put option with a strike of $20. Consider buying a put option with a strike of $30 and selling a call option with a strike of $30. Fill in the table for the payoffs of the box spread
Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 35 1.25 1 36 35 1.45 Intrinsic Value Intrinsic Value Time Value Time Value Cost Cost Close Close Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 40 4.25 1 36 40 0.05 Intrinsic Value Intrinsic Value...
NEED HELP You create a straddle with a call and put option with the same strike price of $50. The price of the call option is $4 and the price of the put option is $3. If the stock price is $18 at the maturity of the options, what is the net payoff from the straddle? A. $17 ம ப ்
G) Consider buying a call and a put option, both with a strike price of $20 and the same expiration. Fill in the table for the payoffs of the straddle
Below is a list of call and put option premiums with different strike prices. The options mature 1 year later. The current stock price is 900. The risk-free interest rate is 6% p.a., continuously compounded. (i) Find out the cost of the following payoff diagram: (ii) Find out the cost of the following payoff diagram: (iii) Find out the cost of the following payoff diagram: (iv) Find out the cost of the following payoff diagram: (v) What is the price...
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...
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...
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
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...