Here is a table of call option quotes on Nike (NKE) from CBOT on 2 March 2020 On that day NKE traded at $89.59 The options expire June 19 2020. Bid Strike $7.90 $8.05 $87.50 $6.55 $6.70 $90.00 $5.30 $5.50 $92.50 Suppose that you purchase the $87.50 strike price call and sell the $92.50 strike call. Ignoring commissions, what does your strategy cost today? Recall that these quotes are per share but listed options are written on 100 shares. $300 $240 $275 Ask $225

Here is a table of call option quotes on Nike (NKE) from CBOT on 2 March 2020 On that day NKE traded at $89.59 The options expire June 19 2020. Bid Strike $7.90 $8.05 $87.50 $6.55 $6.70 $90.00 $5.30 $5.50 $92.50 Suppose that you purchase the $87.50 strike price call and sell the $92.50 strike call. Ignoring commissions, what does your strategy cost today? Recall that these quotes are per share but listed options are written on 100 shares. $300 $240 $275 Ask $225

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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The following table shows the options quotation in U.S. dollars for Big Walnut Nut Company for June 30 of this year. Option Closing Price Strike Price Calls–Last Quote September Puts–Last Quote September 1 $43.00 $47.00 $2.00 $2.20 2 $43.00 $41.00 $3.00 $1.20 3 $43.00 $49.00 $1.60 $2.60 If you could exercise the options listed only on the expiration date (the third Friday of September), then these options would be ____ options. Assuming that the options listed are American options, on June 30, which of the call options for Big Walnut Nut Company listed in the table is in-the-money? Option 2 Option 1 Option 3
The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,200. Exercise Price Expiration Date April 2018 Call Price Put Price $ 31.10 $1,200 1,300 1,400 $1,200 1,300 1,400 $1,200 1,300 1,400 $132.70 73.20 70.10 134.20 $ 53.55 96.00 33.00 July 2018 $161.70 104.00 62.55 156.05 January 2019 $210.00 $ 88.05 155.35 133.25 112.00 190.00 Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,200 × 1.25 = $1,500.00 or fall to $1,200/1.25 = $960.00. a. What would be your percentage return on a January expiration call option with an exercise price of $1,200 if the stock price rose? (Round your answer to 2 decimal places.) b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.) c. Which is riskier: the stock or the option? a. Percentage return b. Percentage return Which is riskier: the stock or the option? % (100) % Option C.
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The below table shows the list of prices for puts expiring in 30 days (T = 1/12). Using the put option with a strike price of $236, estimate the level of the VIX index. K p 230 2.14 231 2.37 232 2.62 233 2.91 234 3.23 235 3.60 236 4.01 237 4.47 238 4.95 Other parameters you'll need: s0 = $234.35r = 0.74%T = 1/12 years (required precision 0.01 +/- 0.01)
The following table lists the options on Amazon shares in January 2018 when Amazon stock was selling for $1,210. Exercise Price $1,210 1,310 1,410 Expiration Date July 2018 Call Price $161.90 104.10 62.65 a. Call option with exercise price of $1,210 b. Put option with exercise price of $1,210 C. Call option with exercise price of $1,310 d. Put option with exercise price of $1,310 e. Call option with exercise price of $1,410 f. Put option with exercise price of $1,410 Use the data in the table to calculate the payoff and the profits for investments in each of the following July maturity options, assuming that the stock price on the expiration date is $1,305. (Negative amounts should be indicated by a minus sign. Round your "Profit" answers to 2 decimal places.) Put Price $53.56 96.10 156.15 Payoff Profit
A trader purchased an at the money 1 year OTC put option on the DAX index for a cost of Eur 10000. What is the traders minimum potential credit Exposure to the counter part over the term of the trade
Contract Name Last Trade Date Last Price Bid Ask Change % Change Volume Open Interest Implied Volatility AAPL200417C00105000 (Links to an external site.) 2019-11-19 3:53PM EST 105.00 (Links to an external site.) 160.65 160.75 165.40 0.00 - 20 100 78.61% 7. Is this contract a call or a put option? 8. How much do you need to pay to buy this option contract? Hint: when you buy the contract, you need to use Ask price.
13. The USDJPY spot price is 115.018 and the one month forward is 115.046. A one month expiration European style call option with a strike price of 115.046 is trading at 4¥ and a put option with the same parameters is trading at 5¥. If we purchase the call and sell the put sketch the payoff of this position at expiry (the expiration date) over the range 114.900 to 115.140. If we were going to hedge an exposure to the Yen should we use the option position or the forward? Justify your answer.
Profit on Option You have purchased a call option contract on Dash common stock. The option has an exercise price of $32.00 and Dash’s stock currently trades at $30.00. The option premium is quoted at $2.20. Calculate your net profit on the option contract if Dash’s stock price rises to $35.00 and you exercise the option. Calculate your net profit on the option contract if Dash’s stock price rises to $33.00 and you exercise the option. c-1. If the stock price is $31.00, what would be the gain or loss if you exercise or not exercise the option. c-2. Based on your answers above would it be more profitable to exercise the option or not exercise the option?
You purchase one Ruth April 25 put contract for a premium of $6.58. You hold the option until the expiration date, when Ruth stock sells for $32 per share. Calculate the profit/loss you will realize on the investment.
Prices as shown on 22 November 2020 Amazon Inc: Current spot price: $ 130 PUTS Strike Price Dec 129 2.67 130 3.15 132 4.2 135 5.85 CALLS Strike PriceDec 129 15 130 4.25 132 2.97 135 1.88 Which two prices will you select to create a Straddle using data from the above table. If price of Amazon Inc moves to 100 sometime in the near future how much profit will you make?

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