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)?
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 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 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 stock price is $25. An investor buys one put option contract on the stock with a strike price of $24 and sells a put option contract on the stock with a strike price of $22.50. The market prices of the options are $2.12 and$1.95, respectively. The options have the same maturity date. Describe the investor's position and the possible gain/loss he will get (taking into account the initial investment).
1. A trader has a put option contract to sell 100 shares of a stock for a strike price of $60. What is the effect on the terms of the contract of (a) A $2 dividend being declared (b) A $2 dividend being paid (c) A 5-for-2 stock split (d) A 5% stock dividend being paid. 1. A trader has a put option contract to sell 100 shares of a stock for a strike price of $60. What is the...
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 $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”
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...
8. The price of a stock on February 1 is $48. A trader sells 200 put options on the stock with a strike price of $40 when the option price is $2. The options are exercised when the stock price is $39. The trader's net profit or loss is
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?
A trader buys a 1M European call option on a share. The stock price is £108 and the strike price is £97. 1)What is the intrinsic value of this option? 2)How would the intrinsic value change if this were a 9M option? 3) Will this option be exercised at maturity? Why or why not? 4)What is time value and how does it change the price of an option?