A trader writes 564 January put options on common shares of Carnival Corporation & plc. Lot size: 100 shares Strike price: 14.7 (on a per share basis) The price of the option is $3.5 (on a per share basis) What are the total gains / losses the trader faces, if price for the underlying shares at the time of option expiration is $12.1?

A trader writes 564 January put options on common shares of Carnival Corporation & plc. Lot size: 100 shares Strike price: 14.7 (on a per share basis) The price of the option is $3.5 (on a per share basis) What are the total gains / losses the trader faces, if price for the underlying shares at the time of option expiration is $12.1?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

The share price of XYZ on April 24 is $124. A trader sells 200 put options on the stock with astrike price of $120 when the option price is $5. The options are exercised when the stock price is $110. What will be the trader’s result? Выберите один ответ: a. 1000$ gain b. 1500 loss c. 1000$ loss d. 1500$ gain e. 2000$ loss
Investor B sold a put option and bought a call option when the stock price is $30. The strike price for both options is $35. Premiums on call and put is $3.55 and $4.05 respectively. At the time of maturity, the stock is trading at $48. How much B earned as profit? a) $5.40 b) $17.50 c) $18.50 d) $13.50
4. JP Morgan's current stock price is $104.50. You purchase 7 December $110 call options on JP Morgan. The call premium (i.e., call price) on these options is $4.55. If JP Morgan's stock price at expiration is $118.25, what is your dollar profit or loss on this investment at expiration?
Assuming that a September put option to buy a share for $100 costs $4.50 and is held until September. Under what circumstances will the holder of this option make a profit? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option.
An investor owns Citibank stock at $75. They want to sell some 3-month out- of-the-money call options against their position. STRIKES 72.50 75 77.50 CALL PRICE 5.60 4.12 2.84 Create a table showing the profit and loss for underlying trading at 70, 72.5, 75, 77.5, 80 and 82.5 for all the positions and the option strategy. Draw an expiry pay-off diagram, using the prices in the table.
An investor has established a long straddle on shares of ABC ltd at sh 5 each for a put option and a call option and a strike price of sh 50. Required: Compute the profits on expiration if the shares are selling at sh 20 sh 40 sh50 sh60 sh 70
Stock in Cheezy-Poofs Manufacturing is currently priced at $50 per share. A call option with a $50 strike and 90 days to maturity is quoted at $1.95. Compare the percentage gains and losses from a $97,500 investment in the stock versus the option in 90 days for stock prices of $40, $50, and $60. (Leave no cells blank - be certain to enter "0" and select "None" wherever required. Input all amounts as positive values. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Options % gain/loss Stock % gain/loss $40 $50 $60
Bha
The stock price of BAC is currently $150 and a put option with strike price of $150 is $10. A trader goes long 300 shares of BAC stock and long 3 contracts of the put options with strike price of $150. a. What is the maximum potential loss for the trader?[x](sample answer: $105.75)b. When the stock price is $161 on the expiration, what is the trader’s net profit?[y](sample answer: $105.75)
4. Shares of ABC Ltd are currently traded at Rs .1770. A call option with a strike price of 1750 and expiring in 90 days is traded at Rs.60 while a put with same strike price and maturity is traded at Rs .25. Show the payoff profile of a long straddle position using these options assuming that the share price on expiry date falls in the range of 1550 to 1950 at intervals of Rs.50. Also show the payoff diagram.
Nikulbhai
Question 1: In the table below you are given the details of the put and call options on the shares of Fica Limited Expiration Date Exercise Price Call Price (Premium) Put Price (Premium) (Rand) (Rand) (Rand) September 2015 430 41.20 11.05 460 22.50 22.20 490 10.10 39.36 January 2016 430 65.98 27.20 Required 1. Determine the pay-off and profit/loss to an investor who; a) Purchases the September-expiration Fica Ltd.'s call options with an exercise price of R490 if the share pri b) Sells the September-expiration Fica Ltd.'s call options with an exercise price of R490 if the share price at expiration is R400? What if the stock price at expiration is R550? at expiration is R400? What if the share pric expiration is R550?

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