An investor made the following trades. Bought a share of stock for $45 Bought a put option, X = 45 for $4 Wrote a call option, X = 50 for $5 If the stock price is $60 at the expiration of the options, what is the total profit to the investor?
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- Assume a stock with an option with the information as follows. • Stock purchased price was $113.• Call option on the stock was purchased at $4. • Call option has strike price at $115.• the stock price is $117on expiration date Please explain the Call Options Payoff Diagrams below, why it plot like this (please explain step by step) . Thank you for your answeringYou currently have a position on a covered call. A covered call is a combination of a long stock and a short call on the same stock. You purchased the stock at the price of $50 and short the call at the premium of $3. The call option has an exercise price of $55. If the stock price increases to $54, what is your net income?An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor sells a call for $.50 with a strike price of $40. What is the maximum profit and loss for this position? Draw the profit and loss diagram for this strategy as a function of the stock price at expiration.
- An investor buys a put option with an exercise price of $40 when the stock price is $42. The option premium is $1. At expiration the stock price is $37. The investor will realize____________. A. a loss of $2. B. a loss of $3. C. a profit of $1. D. a profit of $2.A speculator purchased a call option with an exercise price of $35 for a premium of $4. The option was exercised a few days later when the stock price was $34. What was the return to the speculator? wwwA stock price is $30. An investor buys one call option contract on the stock with a strike price of $28 and sells a call option contract on the stock with a strike price of $27. The market prices of the options are $2 and $1.7, 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). Make a graph of your gain/loss.
- A call option on a stock trading at $58 has an exercise price of $47. The call option is _____ Check all that apply A. in the money B. out of the money C. at the moneyInvestor 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) $13.50Saved a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter "O" if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.) Today's Stock In/Out of the Company Option Strike Price Money? (Click to select) Premium Exercise? Profit Return eBook АВС Call 10 $10.26 1.06 (Click to select) v АВС Put 10 $10.26 0.91 (Click to select) v Print (Click to select) ABC Call 25 $23.93 1.01 (Click to select) v АВС Put 25 $23.93 In the money (Click to select) v eferences 2.21 Out of the money b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. In/Out of the Money? (Click to select) Today's Stock Company Option Strike…
- show this on a diagram please. An investor makes the following three investments: (i) the purchase of a stock for £38(ii) the purchase of a put option for £0.50 with a strike price of £35 and (iii) the sale ofa call option (ie. writing a call option) for £0.50 with a strike price of £40 . What is the maximum profit and loss for this position?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? a. When the stock price is below $50 b. When the stock price is below $54 c. When the stock price is below $60 d. When the stock price is below $64An investor sells a European Put on a share for $4. The stock price is $47 and the strike price is $50. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investor's profit with the stock price at the maturity of the option.