ZuoTi.Pro
Question

A speculator buys a put option with a strike of $40 for $2.71. The stock is...

A speculator buys a put option with a strike of $40 for $2.71. The stock is currently priced at $43.63 and moves to $41.36 on the expiration date. The speculator will exercise the option on the expiration date (if it is feasible to do so). What is the speculator's profit or loss per share? (Do not ignore the premium paid.)

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)

All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
A speculator buys a put option with a strike of $40 for $2.71. The stock is...
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

Similar Homework Help Questions

  • A speculator buys a put option with a strike of $40 for $2.75. The stock is...

    A speculator buys a put option with a strike of $40 for $2.75. The stock is currently priced at $43.86 and moves to $42.57 on the expiration date. The speculator will exercise the option on the expiration date (if it is feasible to do so). What is the speculator's profit or loss per share? (Do not ignore the premium paid.)

  • A speculator buys a call option with a strike of $50 for $2.61. The stock is...

    A speculator buys a call option with a strike of $50 for $2.61. The stock is currently priced at $51.06 and moves to $52.32 on the expiration date. The speculator will exercise the option on the expiration date (if it is feasible to do so). What is the speculator's profit or loss per share? (Do not ignore the premium paid.) Blank 1. Calculate the answer by read surrounding text.

  • Laverne buys a call option on XOM with a strike price of $90.00. XOM is already...

    Laverne buys a call option on XOM with a strike price of $90.00. XOM is already trading at $91.00 per share. Laverne pays a $1.65 premium on the call, which has a three month expiration. If XOM stock goes up to $103.00 per share and Laverne sells the call at a premium of $12.65, how much total profit will Laverne make on this transaction? $126.50 $12.65 $1,265.00 $1,100.00 Shirley believes that Nike (NKE) stock is going to decline in value...

  • Suppose Darlene is a speculator who buys five British pound call options with a strike price...

    Suppose Darlene is a speculator who buys five British pound call options with a strike price of $1.50 and a March expiration date. The current spot price is $1.45 Darlene pays a premium of $0.01 per unit for the call option. Just before expiration, the spot price reaches $1.53 and Darlene exercises the option. Assume one option contract specifies 31,250 units. What is the profit or loss for Darlene?

  • (5 pts) Suppose I sell 5 PUT option contracts on Home Depot with a strike price...

    (5 pts) Suppose I sell 5 PUT option contracts on Home Depot with a strike price of $180.00 and an option premium of $19. The stock price is $209.45 when I sell the put and moves between $199.24 and $215.43 during the time up to expiration. What is my maximum profit or loss on this? (5 pts) Using the date in question 13, what would my maximum profit or loss be if the price of Home Depot stock moved from...

  • An investor buys a 84 strike put option contract with a premium of 4.30 and writes...

    An investor buys a 84 strike put option contract with a premium of 4.30 and writes (sells) an 80 strike put option contract for 2.20. What is the maximum profit per share? Maximum loss per share?

  • Question 7: Consider a European call option and a European put option on a non dividend-paying...

    Question 7: Consider a European call option and a European put option on a non dividend-paying stock. The price of the stock is $100 and the strike price of both the call and the put is $103, set to expire in 1 year. Given that the price of the European call option is $10.57 and the risk-free rate is 5%, what is the price of the European put option via put-call parity? Question 8: Suppose a trader buys a call...

  • 1. Adam buys a put option on British pounds (contract size is £500,000) at a premium...

    1. Adam buys a put option on British pounds (contract size is £500,000) at a premium of S0.05/£. The strike price is $1.20/£. (a) Graph the profit/loss on the option contract. (b) What is the break-even price? (a) At what range of spot prices does John make profit? 2. Bank of America buys a call option on euros (contract size is €625,000) at a premium of $0.02 per euro. If the exercise price is $0.98 and the spot price of...

  • Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call...

    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...

  • A call option with a strike price of $50 on a stock selling at 60 costs...

    A call option with a strike price of $50 on a stock selling at 60 costs $12.5. The call option's intrinsic value is 1) 10, 12.5 2) 12.5, 10 3) 50, 12.5 4) 10, 2.5 5) None of the above 8. and time value is You purchase one share of IBM July call option. The exercise price is 120 and the option premium is $5. You hold the option until the expiration date when IBM stock sells for $123 per...

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