ABC. Draw the payoff diagrams of buying and selling a put option and call option. Which has the highest exposure in terms of loss?
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ABC. Draw the payoff diagrams of buying and selling a put option and call option. Which...
Draw the payoff diagram for owning (buying) a call and a put option with same strike price X. List some examples and explain it.
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
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
d. $5.00 According to put-call parity for European options, purchasing a put option on ABC stock would be equivalent to: a. Buying a call, buying ABC stock, and buying a zero-coupon bond. b. Buying a call, selling ABC stock, and buying a zero-coupon bond. Selling a call, selling ABC stock, and buying a zero-coupon bond. d. Buying a call, selling ABC stock, and selling a zero-coupon bond. C. te 1C Tha riek feee. d. $5.00 According to put-call parity for...
A synthetic European put option is created by: Buying the discount bond, buying the call option, and short-selling the stock. Buying the call option, short-selling the discount bond, and short-selling the stock. Short-selling the stock, buying the discount bond, and selling the call option.
mich of the following strategy can make profit from underlying price drop? A. Buying a put B. Selling a put C. Protective put D. Bullish spread E. None above 7. Which of the following is the riskiest single-option transaction? A. Writing a call B. Buying a put C. Writing a put D. Buying a call E. Riskiness of the all the strategies above is the same 8. Which of the following combinations have similarly shaped profit/loss diagrams? A. Covered 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 trader conducts a trading strategy by selling a call option with a strike price of $50 for $3 and selling a put option with a strike price of $40 for $4. Please draw a profit diagram of this strategy and identify the maximum gain, maximum loss, and break-even point. Hint: Write down a profit analysis matrix to help you draw the payoff lines.
The current price of the Gilead stock is $77 per share. Consider an option strategy, which consists of following positions: Selling one put option on the Gilead stock with the strike price of $75. The price of this put option is $3.44. Buying one put option on the Gilead stock with the strike price of $72. The price of this option is $2.24. Buying one call option on the Gilead stock with the strike price of $81. The price of...
Draw the payoff picture at expiration for a long position in a call option that has a premium of $1.75 and a strike price of $55.