Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Mic...

Question

Question

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Mic...

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Micron call with a strike price of $47.00 for a premium of $1.55 and you sell a Micron call with the same expiration and a strike price of $50 and a premium of 26 cents.

What is your total profit or loss at a stock price of $45.00?

	A.	Gain of $71.00
	B.	Gain of $119.00
	C.	Gain of $129.00
	D.	Loss of $129.00

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Solis (1.55) Call Buy Premium [Paid A call sell Premium [received 0.26 Strike Price of call Buy] = $47 when stock Price = $ 4

Add a comment

Answer 2

Similar Homework Help Questions

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03...

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Micron call with a strike price of $47.00 for a premium of $1.55 and you sell a Micron call with the same expiration and a strike price of $50 and a premium of 26 cents. What is your total profit or loss at a stock price of $50.00? A. Gain of $71.00 B. Gain of $171.00 C. Gain of...
Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03...

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Micron call with a strike price of $47.00 for a premium of $1.55 and you sell a Micron call with the same expiration and a strike price of $50 and a premium of 26 cents. What is your total profit or loss at a stock price of $299.00? A. Gain of $224,000 B. Gain of $171.00 C. Gain of...
Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03...

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Micron call with a strike price of $47.00 for a premium of $1.55 and you sell a Micron call with the same expiration and a strike price of $50 and a premium of 26 cents. What is your total profit or loss at a stock price of $299.00? A. Gain of $224,000 B. Gain of $171.00 C. Gain of...

Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a...

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...
(5 pts) Suppose I sell 10 CALL option contracts on Coke with a strike price of $47.00...

(5 pts) Suppose I sell 10 CALL option contracts on Coke with a strike price of $47.00 and an option premium of 26 cents. The stock price is $45.83 when I sell the call and moves between $43 and $46.25 during the time up to expiration. Assuming that I do not own any Coke stock, what is my profit or loss on this? (5 pts) Using the date in question 11, what would my profit or loss be if the price...
Suppose that you buy a share of stock for 28 dollars, you sell one call for...

Suppose that you buy a share of stock for 28 dollars, you sell one call for 2 dollars, and you buy three puts for 7 dollars each. Assume that all the options have a strike price of 46 dollars, and the same expiration date. If the stock price on the expiration date is 41 dollars, what is your total profit?

25. You buy a call option on Boeing Corp with an exercise price of $40 and...

25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer is A. The...
QUESTION 1 Today you are writing a put option on TSLA stock, which is currently valued at $200 per share. The put optio...

QUESTION 1 Today you are writing a put option on TSLA stock, which is currently valued at $200 per share. The put option has a strike price of $178, 6 months to expiration, and currently trades at a premium of $6.1 per share. If at maturity the stock is trading at $164, what is your net profit on this position? Keep in mind that one option Covers 100 shares. QUESTION 2 Today you go long on 5 December contracts of...
To create a (long) synthetic stock, you should... A. Buy the call, deposit the present value...

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...

questions 25-28 please 25. You buy a call option on Boeing Corp with an exercise price...

questions 25-28 please 25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer...

Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Mic...

Homework Answers

Add Answer to:
Suppose you have a long call spread on Micron Technology. The stock currently trades for $48.03 per share. You buy a Mic...

Post as a guest

Earn Coins