Long or bull straddle: Buy a put and a call with the same T and X IBM Call Put Expiration July Strike Last Last 100 7.35 11.66 1 contract for each Stock price/share 80 80.99 87.5 90 95 100 105 110 115 119.01 125 Call premium (Long call) Put premium (Long put) Payoff (call) Payoff (put) Profit

Long or bull straddle: Buy a put and a call with the same T and X IBM Call Put Expiration July Strike Last Last 100 7.35 11.66 1 contract for each Stock price/share 80 80.99 87.5 90 95 100 105 110 115 119.01 125 Call premium (Long call) Put premium (Long put) Payoff (call) Payoff (put) Profit

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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Stock Price to Profit You buy an “at the money” April call option on M&M Corp. common stock, which has a strike price of $40 and a premium of $3.15. What must happen to the price of M&M Corp. stock for you to make a profit?
A short strangle was initiated with a strike price for the call at $70 and the strike price of the put at $80. The premium recieved for writing/selling the put was $12 and the premium received for writing/selling the call was $15. Within what range must the stock be at expiration to not lose money on this strangle?
Basic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 1. Buy one August 170 call contract. Hold it until expiration. lIdentify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? 2. Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185
Current stock price for XYZ $50.00 Interestrate 3% Dividend rate 0% Option PUT PUT PUT PUT CALL CALL CALL CALL - Strike Expiration Option Price $30.00 6-months $40.00 6-months $50.00 6-months $50.75 6-months - $50.00 6-months $50.75 6-months $55.00 6-months $60.00 6-months $0.14 $0.77 $2.74 $2.97 $3.48 $2.97 $1.20 $0.15 Implied Vol 40% 32% 22% 21% 22% 21% 19% 15% Delta (AOption/AS) -0.023 -0.123 -0.431 -0.470 XYZ stock is currently trading at $50 per share. We ask our favourite trading desk to price a bunch of 6-month options on XYZ: 4 puts and 4 calls. The table above gives the information 0.569 0.530 0.299 0.065 For each option price we've run the price through the Black-Scholes formula and solved for implied volatility. The tables also gives the deltas: the derivative of each option price with respect to the stock price. As you know this means: Leave the implied volatility, the interest rate, and the dividend unchanged Change the current price of the stock by a small amount up and…
ZZ Industries: Price 34.36 Calls: Strike Symbol Last Chg Bid Ask Vol 30.00 ZZBF 4.30 1.07 4.30 4.40 62 32.50 ZZBZ 1.87 1.07 1.82 1.87 236 35.00 ZZBG .01 1.05 .00 .01 3119 Puts: Strike Symbol Last Chg Bid Ask 30.00 ZZNF 32.50 ZZNZ .01 .00 .00 .01 1.02 .00 35.00 ZZNG .60 1.14 .63 Multiple Choice $3.00 Vol 0 $4.00 .01 .01 .68 2637 562 Open Int 3,429 8,168 38,017 You want the right, but not the obligation, to sell 300 shares of ZZ Industries stock at a price of $32.50 a share. How much will it cost you to establish this option position? Open Int 7,258 34,972 19,686 Help Save & Exit Su
← A 8-month call option contract on 100 shares of Home Depot common stock with a strike price of $50.05 can be purchased for $512. Assuming that the market price of Home Depot stock rises to $65 11 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return? The profit this option would generate over the 8-month holding period is $ (Round to the nearest cent.) Correc
Calls Puts Close Hendreeks Strike Price Expiration Vol. Last Vol. Last 103 100 Feb 72 5.20 50 2.40 103 100 Mar 41 8.40 29 4.90 103 100 Apr 16 103 100 Jul 8 10.68 14.30 10 6.60 2 10.10 Suppose you buy 40 July 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $86.40 per share. How much is your options investment worth? What is your net gain? (Do not round intermediate calculations.) Maximum gain Terminal value Net gain
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The data of the listed company is attached as a screenshot.Ques) Explain carefully why the March calls are trading at higher prices than the December calls.
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