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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Question

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

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Similar questions

The following price quotations are for exchange-listed options on Primo Corporation common stock. Strike Expiration Call Put 55 February 7.21 0.48 Company Primo 61.12 Required: With transaction costs ignored, how much would a buyer have to pay for one call option contract. Assume each contract is for 100 shares. Amount for one call option contract
MCQ NEED FAST PLS On July 5, a stock index futures contract with expiration on December 20 settles at 357.24. On the same day, the spot index closes at 361.54. Assume that each index point is worth $1. The risk-free rate of interest is 1.5% per annum and the dividend yield on the spot index is 3.5% per annum (both rates are continuously compounded). Transaction costs are negligible. Then: O One cannot tell if there is an arbitrage opportunity or not, as we don't know what the spot price of the index will be at the expiration of the futures contract Go long the futures, short the spot, invest the proceeds and realize an arbitrage profit of $4.30 Go long the futures, short the spot, invest the proceeds and realize an arbitrage profit of $1.00 Go short the futures, borrow to long the spot and realize an arbitrage profit of $1.00 O The futures and the spot are fairly priced and, hence, there is no arbitrage opportunity
Bullish price spread: Short the high exercise price call and long the low exercise price call IBM Call Expiration July Strike Last 90 13.44 July 95 9.8 July 100 7.35 1 contract for each Stock price/share 80 87.5 90 92.5 96.06 100 105 107.35 110 115 120 Call premium (Long low) Call premium (Short high) Payoff (low) Payoff (high) Profit
Use the following corn futures quotes: Contract Month March May July September Open 455.125 467.000 477.000 475.000 Dollar profit Corn 5,000 bushels Low Settle 452.000 451.750 463.000 463.250 High 457.000 468.000 477.500 472.500 471.750 475.500 473.000 472.250 Change -2.750 -2.750 -2.000 -2.000 Open Interest 597,913 137,547 153,164 29,258 Suppose you buy 18 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 462.500, and you close out your position. Calculate your dollar profit on this investment. Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.
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?
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Underlying Microsoft (MSFT) Price: 295.71 Expiration Strike Call Put 1-Oct-2021 290 9.43 3.63 1-Oct-2021 300 3.60 7.82 1-Oct-2021 310 1.08 15.28 17-Dec-2021 290 17.25 11.72 17-Dec-2021 300 11.75 16.25 17-Dec-2021 310 7.62 22.05
The database is mentioned in the attachment:Ques) Draw a profit diagram for an investor in a call option with an exercise price of 64 that expires in March and explain the diagram. Undertake the same analysis for the writer of the call. Comment on the contention that options are a zero sum game for the writer and investor in options.
A put with a strike price of $50 was sold at $11 when the price of the stock was $48. What was the time value of the put at expiration?
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H2.
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.

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