profit potentials of Puts and Calls
A 6-month call on a certain common stock carries a strike price
of $60. It can be purchased at a cost of $600. Assume that the
underlying stock rises to $75 per share by the expiration date of
the option.
How much profit would this option generate over the
6-month holding period?
Using HPR, what is its rate of return?
Thank you.
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#9. Please help me solve for: "The profit (loss) experienced on option X" for options A-E....
#9. Please help me solve for: "The profit (loss) experienced on
option X" for options A-E. Thanks!
Options profits and losses for each of the 100-share options shown in the following table, use the underlying stock price at expiration and other information to determine the amount of profit or loss an investor would have had, ignoring brokerage fees Option Underlying stock price per share at expiration $51 Type of option Call Call Put Put Call Cost of option $190 $335...
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...
2. value 10.00 points Refer to Elgure 15.1. which lists the prices of various Facebook options....
2. value 10.00 points Refer to Elgure 15.1. which lists the prices of various Facebook options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following Nov-14 expiration options on a single share, assuming that the stock price on the expiration date is $80. (Leave no cells blank- be certain to enter "0"" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)...
A stock's current price is $72. A call option with 3-month maturity and strike price of...
A stock's current price is $72. A call option with 3-month maturity and strike price of $ 68 is trading for 6, while a put with the same strike and expiration is trading for $20. The risk free rate is 2%. How much arbitrage profit can you make by selling the put and purchasing a synthetic put? (Provide your answer rounded to two decimals.) You have purchased a put option for $ 11 three months ago. The option's strike price...
Please explain the answer or steps. Thank you. 21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls...
Please explain the answer or steps. Thank you.
21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9. What is the break-even point for this strategy? A) $55 B) $60 CS61 (Ans: Higher the strike, lower the price of the call. Because S55 strike pays over [55 to infinity]...
You Just a TD stock at $100 and a put option on the TD stock at $5....
You Just a TD stock at $100 and a put option on the TD stock at $5. The put has exercise price of $108 and expiration date is 6 months from now. Assume that the spot price of the TD stock on expiration date turned to as follows (consider each case separately): Spot price at expiration $85 $90 $95 $100 $105 $110 $115 $120 $125 $130 i. What will be value of put option expiration date under each scenario. ii. What...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profit/loss for investments in each of the following
June 2017 expiration options on a single share, assuming that the
stock price on the expiration date is $82. (Leave no cells blank -
be certain to enter "0" wherever required. Loss amounts should be
indicated by a minus sign. Round "Profit/Loss" to 2 decimal
places.)
figure 15.1...
2. The market price of a 100-share European call option contract is $560. The expiration date...
2. The market price of a 100-share European call option contract is $560. The expiration date of the call option is one year from today. On that date, the price of the underlying stock will be either $50 or $32. The two states are equally likely to occur. Currently, the stock sells for $40; its strike price is $41, Suppose you are able to borrow money at 10 percent per annum. Is there an arbitrage chance? How can you make...
2. The market price of a 100-share European call option contract is $560. The expiration date...
2. The market price of a 100-share European call option contract is $560. The expiration date of the call option is one year from today. On that date, the price of the underlying stock will be either $50 or $32. The two states are equally likely to occur. Currently, the stock sells for $40; its strike price is $41, Suppose you are able to borrow money at 10 percent per annum. Is there an arbitrage chance? How can you make...
Use the date in Figure 15.1to calculate both the payoff and the profit or loss per...
Use the date in Figure 15.1to calculate both the payoff and the
profit or loss per share for the investments in each of the
following July 2017 expiration options, if the stock price on the
expiration date is $72. (Loss amounts should be indicated
by a minus sign. Round Profit/Loss to 2 decimal
places.)
Payoff
Profit/Loss
a.
Call option, X = 70
2.00selected answer correct
(0.02)selected answer incorrect
b.
Put option, X = 70
0.00selected answer correct
(0.24)selected answer incorrect...
#9. Please help me solve for: "The profit (loss) experienced on
option X" for options A-E. Thanks!
Options profits and losses for each of the 100-share options shown in the following table, use the underlying stock price at expiration and other information to determine the amount of profit or loss an investor would have had, ignoring brokerage fees Option Underlying stock price per share at expiration $51 Type of option Call Call Put Put Call Cost of option $190 $335...
2. value 10.00 points Refer to Elgure 15.1. which lists the prices of various Facebook options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following Nov-14 expiration options on a single share, assuming that the stock price on the expiration date is $80. (Leave no cells blank- be certain to enter "0"" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)...
Please explain the answer or steps. Thank you.
21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9. What is the break-even point for this strategy? A) $55 B) $60 CS61 (Ans: Higher the strike, lower the price of the call. Because S55 strike pays over [55 to infinity]...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profit/loss for investments in each of the following
June 2017 expiration options on a single share, assuming that the
stock price on the expiration date is $82. (Leave no cells blank -
be certain to enter "0" wherever required. Loss amounts should be
indicated by a minus sign. Round "Profit/Loss" to 2 decimal
places.)
figure 15.1...
2. The market price of a 100-share European call option contract is $560. The expiration date of the call option is one year from today. On that date, the price of the underlying stock will be either $50 or $32. The two states are equally likely to occur. Currently, the stock sells for $40; its strike price is $41, Suppose you are able to borrow money at 10 percent per annum. Is there an arbitrage chance? How can you make...
2. The market price of a 100-share European call option contract is $560. The expiration date of the call option is one year from today. On that date, the price of the underlying stock will be either $50 or $32. The two states are equally likely to occur. Currently, the stock sells for $40; its strike price is $41, Suppose you are able to borrow money at 10 percent per annum. Is there an arbitrage chance? How can you make...
Use the date in Figure 15.1to calculate both the payoff and the
profit or loss per share for the investments in each of the
following July 2017 expiration options, if the stock price on the
expiration date is $72. (Loss amounts should be indicated
by a minus sign. Round Profit/Loss to 2 decimal
places.)
Payoff
Profit/Loss
a.
Call option, X = 70
2.00selected answer correct
(0.02)selected answer incorrect
b.
Put option, X = 70
0.00selected answer correct
(0.24)selected answer incorrect...
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