Homework Answers
Trader sells 200 put options on stocks with a strike price of $40 when the option Price(premium) is $2
Excercise price when the price is $39
Payoffs for 200 options = ($40 - $39)*200
= $200
The option price(Premium)on 200 options to be received = 200 options*$2
= $400
Net/(loss) = Premium Received - Payoffs
= $ 400- $200
Net Profit = $200
If you need any clarification, you can ask in comments.
If you like my answer, then please up-vote as it will be motivating
Add Answer to:
8. The price of a stock on February 1 is $48. A trader sells 200 put...
The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the opti...
The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader’s net profit or loss? Please show work! I know the answer is “gain of $1,500”
4. A trader buys a European call option and sells a European put option. The options...
4. A trader buys a European call option and sells a European put option. The options have the same underlying asset, strike price and maturity. Show that the trader's position is equivalent to a forward contract with delivery price that is equal to the strike price of the options.
The price of a stock is $64. A trader buys 1 put option contract on the...
The price of a stock is $64. A trader buys 1 put option contract on the stock with a strike price of $60 when the option price is $10. When does the trader make a net profit (that is greater than zero)?
4. A trader buys a call option and sells a put option. The options have the...
4. A trader buys a call option and sells a put option. The options have the same underlying asset, strike price, and maturity. Describe the trader's position. What is the advantage to making such a trade?
Consider an options trader who sets up a condor trading strategy on Boston Scientific Corp. stock....
Consider an options trader who sets up a condor trading strategy on Boston Scientific Corp. stock. The option trader buys a call option with a strike price of $25, sells a call option with a strike price of $30, sells a call option with a strike price of $40, and buys a call option with a strike price of $45. Complete the table below with the correct formulas to show the profit/loss for different values of the stock price at...
The price of a stock is $64. A trader buys 1 put option contract on the stock with a strike price of $60 when the option...
The price of a stock is $64. A trader buys 1 put option contract on the stock with a strike price of $60 when the option price is $10. When does the trader make a profit? When the stock price is higher than $70 none of the above When the stock price is higher than $64 When the stock price is lower than $50 When the stock price is lower than $54
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March...
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March 2019 expiration and strike price $150. The price of the option was $4.50. What are trader's potential gains and losses? O A Unlimited loss, gain is limited to $4,500 O B ossis limited to $150,000, gain is limited to $4,500. O C Unlimited profit, loss is limited to $4,500 O D Profit is limited to $145,500, loss is limited to $4,500
A trader creates a long strangle with put options with a strike price of $160 per...
A trader creates a long strangle with put options with a strike price of $160 per share, and call options with a strike price of $170 per share by trading a total of 20 option contracts (10 put contracts and 10 call contracts). Each contract is written on 100 shares of stock. The put option is worth $18 per share, and the call option is worth $15 per share. What is the value (payoff) of the strangle at maturity as...
A trader creates a long strangle with put options with a strike price of $160 per...
A trader creates a long strangle with put options with a strike price of $160 per share, and call options with a strike price of $170 per share by trading a total of 20 option contracts (10 put contracts and 10 call contracts). Each contract is written on 100 shares of stock. The put option is worth $18 per share, and the call option is worth $15 per share. What is the value (payoff) of the strangle at maturity as...
A trader buys a European call option and sells (short) a European put option. The options...
A trader buys a European call option and sells (short) a European put option. The options have the same underlying asset, strike price, and maturity. Describe the trader’s position. The trader monitors the market continuously and finds at one point that the call is significantly overpriced relative to fair value. What strategy is available for the trader to lock in a profit at current prices?
4. A trader buys a European call option and sells a European put option. The options have the same underlying asset, strike price and maturity. Show that the trader's position is equivalent to a forward contract with delivery price that is equal to the strike price of the options.
4. A trader buys a call option and sells a put option. The options have the same underlying asset, strike price, and maturity. Describe the trader's position. What is the advantage to making such a trade?
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March 2019 expiration and strike price $150. The price of the option was $4.50. What are trader's potential gains and losses? O A Unlimited loss, gain is limited to $4,500 O B ossis limited to $150,000, gain is limited to $4,500. O C Unlimited profit, loss is limited to $4,500 O D Profit is limited to $145,500, loss is limited to $4,500
Most questions answered within 3 hours.
-
20% of all customers subscribe to phone service.
70% of all customers subscribe to internet service....
asked 8 minutes ago -
Write a program to solve the Josephus problem, with the following
modification:
Sample Input:
./a.out n...
asked 2 hours ago -
At the start of a CD it is spinning at a rate of 525 rpm
(revolutions...
asked 3 hours ago -
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 4 hours ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 5 hours ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 5 hours ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 5 hours ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 6 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 7 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 7 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 7 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 7 hours ago