Explain this step by step: Gerald purchased 3 put option contracts at an option premium of $0.95 and a strike price of $40. At expiration, the stock price was $42.25 per share. What is his percentage return? What is the percentage return if the stock price at expiration is $39.05?  What is the percentage return if the stock price at expiration is $36.18?

Q: An investor purchases a Put Option on a share for £3.00. The share price is $42 and the strike price…

A: A put option refers to a derivative instrument that provides its holder the choice of selling the…

Q: Give typing answer with explanation and conclusion to all parts 1. A trader has a put option…

A: An option contract is a derivative contract that allows its buyer to acquire or sell the underlying…

Q: You wrote a call option on the stock of PIGN at a strike price was $55.55. The premium you received…

A: Position of call option writer is exactly opposite of call option holder. Seller will receive option…

Q: ou have purchased a put option on ABC common stock for $3 per contract. The option has an exercise…

A: Profit on put is the difference between the exercise price of put option and closing price of put…

Q: An investor purchases 25 call option contracts at a price of $1.86 and a strike price of $50. At…

A: Given: Contract price =$1.86Strike price =$50Stock price =$47.62Option purchase =25 (100 share)

Q: Kelsey Tanaka is an investor who buys a 100-share put option for $150.  It has an exercise price of…

A: Option Put Contract size 100 Cost 150 Excise price 38 Expiration price 39 A put option is…

Q: You purchased two $35 call contracts at $3.40 per option. You exercised the option on expiration day…

A: Call Option is a financial derivative contract which givers option buyer a right not obligation to…

Q: EStIon20 You have purchased a put option on ABC common stock for $3 per contract. The option has an…

A: Puts give the buyer the right, but not the obligation, to sell the underlying asset at the strike…

Q: Snyder purchased a call option on a stock (non- dividend). The time to maturity is 0.4 years. The…

A: An option is an agreement between two parties granting one the opportunity to buy or sell a security…

Q: Suppose you purchase eight call contracts on Macron Technology stock. The strike price is $60 and…

A: Value of call option = Max(0,ST-K) Where, ST is stock price as time T K is strike price Net profit…

Q: e that Sara gets into a short European put option to sell one share of stock Y for $66 that costs $7…

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: An investor purchases a stock for $47 and a put for $0.95 with a strike price of $45. The investor…

A: Maximum profit is the difference between the strike price of the call sold and the purchase…

Q: An investor buys a put option with an exercise price of $40 when the stock price is $42. The option…

A: to sell the stock at the given strike price, if the stock price comes below the strike price, the…

Q: Please show step by step how to solve this CBE is currently trading at $120/share. You sold 8…

A: To solve the problem, we need to determine the gains or losses for selling put options under…

Q: You purchase a call option on Stock A with an exercise price of $85 for a premium of $1.9. You hold…

A: A call option is right to purchase a stock at the strike price  when spot price is less than…

Q: At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put…

A: Naked option is created when the option writer (seller) does not currently own any, or enough, of…

Q: Suppose you own a call option on a stock with a strike price of $20 that expires today. The price of…

A: Call option gives the right to the owner of the option to buy an underlying asset at the price…

Q: An investor tells their broker to short 1,000 shares of a stock that is currently priced at $50. Is…

A: A trading or investment technique known as short selling makes predictions about the price decline…

Q: what is the maximum profit the writer of this covered call can earn if the position is held to…

A: In a covered call strategy, you buy the underlying stock and at the same time you sell a call option…

Q: You have purchased a put option on ABC common stock for $3 per contact. The option has an exercise…

A: Given: Put option value = $3 Exercise price = $57 Stock price = $45…

Q: Neha wrote five call option contracts with a strike price of $33.70 and an option price of $.60 per…

A: Strike price refers to the price at which an option holder can exercise his right to buy or sell the…

Q: Suppose you buy a put option to sell GM common stock at $80 per share in March. The current price of…

A: Key references: General Finance

Q: A PUT and a CALL option are written on a stock with a strike price of $60. The options are held…

A: Strike Price = $60 Spot price = $75 Call premium = $16 Put Premium = $3

Q: An investor has a short position in both a call and a put options on the same share of stock with…

A: Exercise price of call = $40Exercise price of put = $35Call premium = $2Put premium = $1To find:…

Q: Mary buys 23 call options with a strike price of $85 and a premium of $3 per contract. If at…

A: Number of call options = 23 Strike price = $ 85 Premium per contract = $ 3 Expiration price = $ 79

Q: Calculate (i) the cashflow today, (ii) the cashflow at maturity, and (iii) the net profit from your…

A: In this we have to calculate the cash flow at beginning and MATURITY and than find out profit.

Q: Graph the profits and losses associated with writing a call option on a security with a strike price…

A: Given Strike price =$60 and Premium of $5.

Q: Suppose you write 32 put option contracts with a $60 strike. The premium is $2.40. Evaluate your…

A: Number of put options: 32Put option premium: $2.40Strike price: $60

Q: The market price of a stock is $35.00. An investor has purchased a call option for 100 shares of…

A: Price of underlying asset = $35 Exercise price = $20 Number of shares = 100 Intrinsic value of the…

Q: The price of a stock is $60. A trader sells 1 call option contract (each contract is for 100…

A: A call option means the option to buy the stock at strike price.

Q: 1. What is the gamma of the option,

A: An option is an agreement between two parties granting one the opportunity to buy or sell a security…

Q: Sarah purchases a call of CBA with exercise price $55 and sells a call of CBA with exercise price…

A: Strategy: Buy call option at an exercise price of $55 Sell Call option at an exercise price of $50…

Q: Suppose you purchase XYZ 100 shares of call option. Each option is with exercise price 124. Each…

A: Answer Call option shall exercise only if expiry price is higher then exercise price. If expiry or…

Q: You own a call option on Intuit stock with a strike price of $39. When you purchased the option, it…

A: Data  given: Strike price                                = $39 Cost of option( premium paid) = $7…

Q: You have purchased a put option on Pfizer common stock. The option has an exercise price of $45 and…

A: Since strike price is lower than stock price , option will not be exercised.Premium paid will be…

Q: Mr. A bought a put option of 6 months for a price of $50. The strike price is $150. At the end of 6…

A: Strike price is the price at which a stock can be bought or sold.

Q: You have the following share price of XYZ.   DATE Price 2-Mar-2021 $100 3-Mar-2021 $60…

A: Purchase Value = No. of shares * Share price  Purchase Value = 100 shares * $100 = $10000

Q: You buy a share of stock, write a 1-year call option with X= $55, and buy a 1-year put option with…

A: Call option writing refers to selling a call option to another investor where the buyer has complete…

Q: Assume that you hold a call option on stock A. The call has a strike price of 50 and expires in 6…

A: Options are the derivative tool that derives the value from an underlying asset. These contracts…

Q: You shorted a call option on Intuit stock with a strike price of $34. When you sold (wrote) the…

A: Strike Price of $34 Premium received is $6 Time to expiry is 3 months To Find: Payoff  profits

Q: You shorted a call option on Intuit stock with a strike price of $34. When you sold (wrote) the…

A: Call option:A call option is a fiscal tool granting people the chance to buy an asset at a destined…