Option trading 1 Mike buys 6 call options (contracts) on Boeing. Mike does not hold Boeing...
Option trading 1
Mike buys 6 call options (contracts) on Boeing. Mike does not hold Boeing stock or other option positions. The options expire in five months. The premium is c=$19.97. How much cash in total, at a minimum, does Mike need to make this purchase?
Homework Answers
Premium for 1 call option = $19.97
Mike buys 6 call options (contracts) on Boeing.
So number of options = 6
cash required to buy call option = Premium*Number of options
=19.97*6
=119.82
So $119.82 cash in total, at a minimum, does Mike need to make this purchase.
Add Answer to:
Option trading 1
Mike buys 6 call options (contracts) on Boeing. Mike does not
hold Boeing...
Option Trading 4 Microsoft stock is trading at $107. A put option expiring in two months...
Option Trading 4 Microsoft stock is trading at $107. A put option expiring in two months has a strike price of $101.20 and is trading at a premium of c=$0.15. Mike, who has no other Microsoft stock or option positions, writes 14 contracts. Find Mike's margin requirement in total.
1) Using the table, what is the commission if an investor buys 15 call option contracts...
1) Using the table, what is the commission if an investor buys
15 call option contracts with a strike price of $30, if the option
price is $4.00?
2)Now let’s assume the day before the option expires, the stock
is trading at $40 per share. If the investor sells the options for
$10.05 (makes the offsetting trade), how much is the net
profit?
**I am Not understanding how I will use strike price
in part 1 and stock price in...
A call option on a stock, with time to maturity of 2 months and strike price of $24.39, is currently trading at a premiu...
A call option on a stock, with time to maturity of 2 months and strike price of $24.39, is currently trading at a premium of $1.85 per share. If you buy options on 20,000 shares (200 contracts), and then at maturity the stock is trading at $22.78, what is your net profit from this position?
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...
1. Apple call options strike $330.00 is trading at $127.50 today. Under what circumstances does the...
1. Apple call options strike $330.00 is trading at $127.50 today. Under what circumstances does the investor of a long call make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investors profit with the stock price at the maturity of the option. hint: K = 330 C=127.50 Long call profit: St-K-c>0 , 2. Apple put options strike $460 is trading at $6.35 today. Under what circumstances does the investor make...
The current price of a stock is $31.50 per share, and six-month European call options on...
The current price of a stock is $31.50 per share, and six-month European call options on the stock with a strike price of $32.50 are currently trading at $3.60. An investor, who has $10,000 of capital to invest, believes that the price of the stock will increase by 20% over the next six months. The investor is trying to decide between two strategies - buying shares or buying call options. What return will each strategy produce after six months, if...
4. The dollar to the euro is quoted at $1.1140/€ today. Call options on the euro...
4. The dollar to the euro is quoted at $1.1140/€ today. Call options on the euro with an exercise price of $1.1120/€ and expiration in three months are selling for $0.0240/€. Each option contract calls for the exchange of €62,500. You start with $124,300 (plus or minus enough dollars to round to nearest whole contract). a. If you buy the euro calls, how much premium do you pay per contract? b. How many call contracts can you buy? c. If...
Note: Select options are "low/high" and "limited/unlimited" In mid-May, there are two outstanding call option contracts...
Note: Select options are "low/high" and "limited/unlimited"
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.: Call # Exercise Price Expiration Date Market Price August 19 1 $54 $8.10 2 60 August 19 3.20 a. Assuming that you form a portfolio consisting of one Call #1 held long and two Calls #2 held short, complete the following table showing your intermediate steps. In calculating net profit, be sure to include the net initial...
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.:...
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.: Call # Exercise Price Expiration Date Market Price 1 $50 August 19 $8.20 2 60 August 19 3.28 A: Assuming that you form a portfolio consisting of one Call #1 held long and two Calls #2 held short, complete the following table showing your intermediate steps. In calculating net profit, be sure to include the net initial cost of the options. Do not round...
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.: Call # Exercise Price...
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.: Call # Exercise Price Expiration Date Market Price 1 $50 August 19 $8.40 2 60 August 19 3.34 A. Assuming that you form a portfolio consisting of one Call #1 held long and two Calls #2 held short, complete the following table showing your intermediate steps. In calculating net profit, be sure to include the net initial cost of the options. Do not round...
1) Using the table, what is the commission if an investor buys
15 call option contracts with a strike price of $30, if the option
price is $4.00?
2)Now let’s assume the day before the option expires, the stock
is trading at $40 per share. If the investor sells the options for
$10.05 (makes the offsetting trade), how much is the net
profit?
**I am Not understanding how I will use strike price
in part 1 and stock price in...
The current price of a stock is $31.50 per share, and six-month European call options on the stock with a strike price of $32.50 are currently trading at $3.60. An investor, who has $10,000 of capital to invest, believes that the price of the stock will increase by 20% over the next six months. The investor is trying to decide between two strategies - buying shares or buying call options. What return will each strategy produce after six months, if...
4. The dollar to the euro is quoted at $1.1140/€ today. Call options on the euro with an exercise price of $1.1120/€ and expiration in three months are selling for $0.0240/€. Each option contract calls for the exchange of €62,500. You start with $124,300 (plus or minus enough dollars to round to nearest whole contract). a. If you buy the euro calls, how much premium do you pay per contract? b. How many call contracts can you buy? c. If...
Note: Select options are "low/high" and "limited/unlimited"
In mid-May, there are two outstanding call option contracts available on the stock of ARB Co.: Call # Exercise Price Expiration Date Market Price August 19 1 $54 $8.10 2 60 August 19 3.20 a. Assuming that you form a portfolio consisting of one Call #1 held long and two Calls #2 held short, complete the following table showing your intermediate steps. In calculating net profit, be sure to include the net initial...
Most questions answered within 3 hours.
-
A 5.20 mW helium neon laser emits a visible laser beam with a
wavelength of 633...
asked 1 minute from now -
In preparing its cash flow statement for the year ended December
31, 2018, Green Co. gathered...
asked 1 second ago -
Donna is 18 years old and full time accounting student.She is
saving for an overseas holiday...
asked 27 seconds ago -
Service-oriented architectures (SOA) provide
object-oriented architectures for web platforms that represent a
collection of services. SOA...
asked 59 seconds ago -
Le Terroir Winery is considering an expansion project to produce
fine wines. The trial expansion will...
asked 10 minutes ago -
The Bahraini public budget experiences deficit in the last
seven years, what are procedures are taken...
asked 17 minutes ago -
You invested $30,000 in a mutual fund at the beginning of the
year when the NAV...
asked 20 minutes ago -
Would you expect the price elasticity of supply for guitars to
be more inelastic in the...
asked 22 minutes ago -
A snowmobile is originally at the point with position vector
30.1 m at 95.0° counterclockwise from...
asked 22 minutes ago -
MAN3240 Organizational Behavior
In one to two paragraphs
6.) How can understanding emotions make me more...
asked 30 minutes ago -
Identify one individual who, in your opinion, is an excellent
leader. List the qualities that this...
asked 27 minutes ago -
For the data set shown below, complete parts (a) through (d)
below. x 3 4 5...
asked 34 minutes ago