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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Consider April 2023 expiration call option on a share of AELZ stock with an exercise price of K95 per share selling on March 2, 2023 for K1.35. Exchange traded options expire on the third Friday of the expiration month, which for this option was April, 20. On March 2, AELZ sells for K90.90. Would you exercise the option? On April 20, AELZ sells for K96, what would be the value of the option at expiration? How much profit will the call holder make?
Solve question b
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 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)
You establish a straddle on Walmart using September call and put options with a strike price of $97. The call premium is $7.85 and the put premium is $8.60. Required: a. What is the most you can lose on this position? (Input the amount as positive value. Round your answer to 2 decimal places.) b. What will be your profit or loss if Walmart is selling for $98 in September? (Input the amount as positive value. Round your answer to 2 decimal places.) c-1. What is the Break-even price for lower bound? (Round your answer to 2 decimal places.) c-2. What is the Break-even price for upper bound? (Round your answer to 2 decimal places.)
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.
PROTECTIVE PUTS Current stock price for Amazon is $810. A put option on Amazon stock with the exercise price of $810 and maturity of 1 month sells at $5 premium. Ignore interests. (1)Plot the payoff against Amazon’s stock price if you buy only Amazon stock What is your max gain? What is your max loss? (2)Plot the payoff against Amazon’s stock price if you buy only put option on Amazon stock What is your max gain? What is your max loss? (3)Plot the payoff against Amazon’s stock price if you buy both Amazon stock and put option on Amazon stock What is your max gain? What is your max loss?
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?
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?
Please show the steps and calculations
Maturity (days) Strike 66 Part1: SO 620 595.9355586 ● r (annualized) O 0.056329721 11% Option Type Call Use the data you are provided with on blackboard to replicate and interpret the following figures Call price as a function of the current underlying price S0 or put price as a function of the current underlying price SO depending on the data assigned to you. Carefully interpret the figures. Make sure you are not simply describing the figures but that you are answering the question of why we observe the pattern
Assume that on Friday August 1, you sell one Chicago Board of Trade September Treasury bond futures contract at the opening price of $97000. The initial margin requirement is $2500 and the maintenance margin requirement is $2000. The settlement price of the contract at closing on that day is $97500. Your margin account balance at the end of the day is $ . Question 15 options:

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