Option A : Corrent
Write a Put option with strike price of $130. This way the buyer of option will exercise the option when price is 130 or lower than 130, and you will get the stock at 130. If the price remains above 130, you get the option premium as profit.
Option B gives the obligation to sell. But in question user wants to buy.
Option C would be like buying the stock at $150, which is not the objective
Option D gives the option to see.But in question user wants to buy.
A stock is trading at $150, and you feel it would be a great buy if...
Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a share. You want to ensure that you do not lose more than $200 a share. Which of the following option strategies would allow you to do this? A. A covered call B. A naked call C. A protective put D. You cannot ensure that you will not have losses with stocks Suppose I buy 100 shares of AMD and want to limit my losses...
A stock is currently trading at $20. Suppose an investor pays $5 for an option with strike $14, maturity one year. What type of option did the investor buy? European call American call European put American put
You simultaneously write a put and buy a call, both with strike prices of $50, naked, i.e., without any position in the underlying stock. What are the expiration date payoffs to this position for stock prices of $40, $45, $50, $55, and $60? (Negative amounts should be indicated by a minus sign. Leave no cells blank- be certain to enter "0" wherever required. Omit the "S" sign in your response.) Stock Call Payoff Total Payof Price $40 $ $45 $...
1) a) Shaun owns one share of X Stock which is currently trading at $150. He thinks that X stock will appreciate over the next year, but wants to protect himself from possible losses. He then decides to write a one-year call option on X stock with a strike price of $165, which he sells for a $10 premium. He immediately uses the $10 to purchase a one-year put option on X stock with a strike price of $150. Plot...
To create a (long) synthetic stock, you should... A. Buy the call, deposit the present value of the strike in a risk free bank account and write a put (for the same strike and expiration as the call) . B. Buy the call take out a loan in the amount of PV(X) and buy a put (for the same strike and expiration as the call). C. Sell a call, borrow the present value of the strike, and buy a put...
The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next three months. You do not know whether it will go up or down, however. The current price of the stock is $115 per share, the price of a three-month call option with an exercise price of $115 is $8, and a put with the...
The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next three months. You do not know whether it will go up or down, however. The current price of the stock is $125 per share, the price of a three-month call option with an exercise price of $125 is $10, and a put with the...
Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a share. You want to ensure that you do not lose more than $200 a share. Which of the following option strategies would allow you to do this? A. A covered call B. A naked call C. A protective put D. You cannot ensure that you will not have losses with stocks
Koka Kola common stock is currently trading for $29 per share. A put option on the stock with a strike price of $32 that expires in 334 days is selling for $3.76. A call option on the stock with a strike price of $32 that expires in 334 days is currently trading for $1.99. What is the exercise value of the put option? (Rounded to the nearest cent.) $ What is the put option's time premium? (Rounded to the nearest...
a) Suppose you write five naked call option contracts. The option price is $3.50, the strike price is $60.00, and the stock price is $57.00. What is the margin requirement? b) Suppose you write five naked PUT option contracts. What is the initial margin requirement?