Homework Answers
(a) & (b)The payoff graph (diagram) for a long call option with strike $ 55 and premium of $ 6 will be as shown below:
where Breakeven point is the point at which the payoff curve crosses the x-axis. The Breakeven Point = Strike Price + Premium = 55 + 6 = $ 61
Maximum Loss = Premium = $ 6 and Maximum Profit = Unlimited (as the graph is open and upward sloping)
NOTE: Y-axis is the payoff from the long call position and X-axis is the price of the underlying asset (stock in this case)
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3 question (10%). a Draw a profit or loss graph for purchase of call contract with...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of s30 for which a SS premium is paid a. b. Identify the break-even point, maximum profit, and maximum posses Dr.oec. A. Cirjevskis, professor 09.01.2019
ncentive pay Total 3 question (10%). a Draw a profit or loss graph for purchase of...
ncentive pay Total 3 question (10%). a Draw a profit or loss graph for purchase of call contract with an exercise price of S5S for which a 6 premium is paid. A Identify break-even point, maximum profit, and maximum losses Dr.oec. A. Čirjevskis, professor 09.01.2019 RISEBA ko
3 question (15%). a Draw a profit or loss graph for call writer with an exercise...
3 question (15%). a Draw a profit or loss graph for call writer with an exercise price of S55 for which a S6 premium is paid. b. Identify break-even point, maximum profit, and maximum losses.
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of S30 for which a Ss premium is paid. a. Meuly the Bra.p,
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise...
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise price of sSs for which a S6 premium is paid b. Identlfy break-even point, masxdmum preft, and maximum losses. Dr.oec. A. Čirjevskis, professor 09.01.2019
Need help on Question 9. & 10. Thanks 9) Identify the net profit/loss PER CONTRACT for...
Need help on Question 9. & 10. Thanks
9) Identify the net profit/loss PER CONTRACT for the given option position. Each contract covers 100 shares. Clearly indicate any loss with a negative value. Assume the position is held until expiration. A long SPY 192.50 call (premium $1.36/share). SPY is trading at $197/share at expiration. 10) Identify every breakeven point for the overall option strategy. A ratio call write (stock purchased at $50, 3 short calls with strike = 55 and...
For all call and put options, answer questions based on per share price, per share premium,...
For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the first question is asking from the buyer of the call option's point of view and the second question is asking from the seller of the put option's point of view. Answering the questions from the wrong perspective will not be granted most of credits. 2. The market price for Alibaba Group Holding Limited. (Ticker: BABA) was $198.74...
A trader conducts a trading strategy by selling a call option with a strike price of...
A trader conducts a trading strategy by selling a call option with a strike price of $50 for $3 and selling a put option with a strike price of $40 for $4. Please draw a profit diagram of this strategy and identify the maximum gain, maximum loss, and break-even point. Hint: Write down a profit analysis matrix to help you draw the payoff lines.
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium...
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...
Show work please You purchase one (1) call option with strike price 50 for $ 9...
Show work please You purchase one (1) call option with strike price 50 for $ 9 and write three (3) call options with strike 60 for $ 3. 1) Draw the payoff and profit table for this strategy at maturity. 2) When do you break-even (profit=0) at maturity? 3) What are your anticipations about the stock at maturity (when do you make money)? 4) Assume that you may purchase calls with strike price 70 for $ 1. How many options...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of s30 for which a SS premium is paid a. b. Identify the break-even point, maximum profit, and maximum posses Dr.oec. A. Cirjevskis, professor 09.01.2019
ncentive pay Total 3 question (10%). a Draw a profit or loss graph for purchase of call contract with an exercise price of S5S for which a 6 premium is paid. A Identify break-even point, maximum profit, and maximum losses Dr.oec. A. Čirjevskis, professor 09.01.2019 RISEBA ko
3 question (15%). a Draw a profit or loss graph for call writer with an exercise price of S55 for which a S6 premium is paid. b. Identify break-even point, maximum profit, and maximum losses.
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of S30 for which a Ss premium is paid. a. Meuly the Bra.p,
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise price of sSs for which a S6 premium is paid b. Identlfy break-even point, masxdmum preft, and maximum losses. Dr.oec. A. Čirjevskis, professor 09.01.2019
Need help on Question 9. & 10. Thanks
9) Identify the net profit/loss PER CONTRACT for the given option position. Each contract covers 100 shares. Clearly indicate any loss with a negative value. Assume the position is held until expiration. A long SPY 192.50 call (premium $1.36/share). SPY is trading at $197/share at expiration. 10) Identify every breakeven point for the overall option strategy. A ratio call write (stock purchased at $50, 3 short calls with strike = 55 and...
For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the first question is asking from the buyer of the call option's point of view and the second question is asking from the seller of the put option's point of view. Answering the questions from the wrong perspective will not be granted most of credits. 2. The market price for Alibaba Group Holding Limited. (Ticker: BABA) was $198.74...
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...
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