Ms. Co currently own a put option on Stock A with a strike price of P45. If the current price of Stock A is P40, then what is the in-the-money amount of the option?
Q: Assume a call option on a particular stock whose current market price is $ 100. The option has a…
A: Strike Price = $100 Price can go up to $110 Price can go down to $90 For a call If Price = $110 ,…
Q: A put option with an exercise price of P90 was priced at P4. At expiration, the underlying stock is…
A: A put option is a contract that grants the holder the right to sell a certain number of equity…
Q: Assume that you have an American call option expiring next year with exercise price of $40 on a…
A: The stock is the capital of the company that is issued by the company in order to obtain capital for…
Q: According to the Black-Scholes Model, a call option has a value of 4,500. The underlying asset…
A: Market Value is 140,000 Total Exercise price of the option is 138,000 Market price of the call…
Q: les price of a call option on a stock which does not pay dividends and has the volatility 0.3, if…
A: The given problem relates to Black scholes model.
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: Consider a stock with the current market price equal to So. A trader buys a call optic the stock…
A: Call and put option are used for hedging position in market.
Q: You buy an “at the money” April call option on M&M Corp. common stock, which has a strike price of…
A: ATM calls and puts have a striking price that is equal to or extremely near to the current market…
Q: Rachel is considering an investment in Yonan Communications, whose stockcurrently sells for $65. A…
A: Compute the current exercise value of put option: The table below shows the Excel formula to…
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: Suppose a trader buys a stock at $70, buys a put option on the same stock with strike X at a price…
A: In trader have long position on stock and long positions on put. Traders make profit on long…
Q: A trader buys a European put on a share for K3. The stock price is K42 and the strike price is K40.…
A: Put options: Put options give the buyer the right, but not the obligation to sell the underlying…
Q: A speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium…
A: Speculators are those persons or institutions who speculate the movement in stock prices. The…
Q: 1. ABC Corp has a stock price of $100 and a one-year Option with a strike price of $105. Assuming an…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Eric has an option position on Langdon stock that results in a zero dollar payoff when the stock…
A: Purchasing a put option means the right to sell at certain security only if stock price is less than…
Q: Suppose an investor purchases a 3-month call option and a 3-month put option on ABC stock. The the…
A: The options gives the opportunity to buy or sell the stock on expiration by payment of premium but…
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: An investor purchases a call option at a premium of $1.25, with an exercise price of $7.50 within…
A: “In the money” refers to the price where the investors are benefitted if the option is exercised.…
Q: Mary buys 23 call options with a strike price of $85 and a premium of $3 per contract. At what price…
A: The call option gives the owner the right to sell an asset at a predetermined price. The call option…
Q: An investor pays $3 to buy a call option on MSFT with a strike price of $45, and receives $2 for…
A: "A strike price is a price at which a derivate contract can be purchased or sold". When the investor…
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 own 200 shares in AAPL and would like to protect your position from an unexpected drop…
A: Protective put strategy is the type of option strategy which will be helpful in protecting against…
Q: An investor buys a put option at a premium of $4.6 with an exercise price of $30. At what stock…
A: Break-even on purchase of put option = Exercise Price - Premium
Q: 1. Fahad gets into a long European call option to purchase one share of stock X for $95 that costs…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: For a call option on IBM, if the current market price is $130 per share, the strike price is $120…
A: The intrinsic value of the option is also called the value the option is in the money. The…
Q: Assume you are a speculator who purchased a IPE Brent Crude call option contract at an…
A: Call option gives holder an option to purchase the stock. it gives a right but not an obligation to…
Q: 1. You buy a call option on a stock for $7 with a strike price of $60. The stock currently sells for…
A: For calculating profit or loss on options, we have to compute selling price with strike price.…
Q: Suppose that a March call option to buy a share for $50 costs $2.50 and is held until March. The…
A: Options are a kind of financial derivative that provides its holder the right to either buy or sell…
Q: the stock will be worth $25. | What is the present discounted value of the call option? | What would…
A: A call option gives the holder of the option a right, but not an obligation to buy stocks at a…
Q: Consider the following information on AAPL. The current stock price is $326.72. The call option has…
A:
Q: One of the categories of options available to investors and speculators is LEPOs. Assuming 7.00 per…
A: A low exercise price option (LEPO) LEPO is a European-style call option.LEPO IS CALL OPTION with an…
Q: to gan at expiration Apple stock sells for £55, then the option holder could acquire the Apple share…
A: Call Option: It is a contract that gives the buyer the option the right to buy the security at a…
Q: Consider the following: your purchased a put option on JPM two months ago, with a strike price for…
A: Put option Put option gives an investor the right to sell a stock but not an obligation to sell.…
Q: Suppose you own a put option that gives you the right to sell 300 shares of Brad’s Drink to another…
A: Strike Price =$28 CMP of the stock=$29 Do not exercise the option.
Q: The investor Y decides to: Buy a call option for $5 with $200 as strike price Sell a put option…
A: Call Bought for $5 at $ 200 Put sold for $ 10 at $100 Initial Inflow = $10-$5 = $5
Q: An investor owns a put option with a strike price of $ 20, the premium paid was $ 2.The stock price…
A: Put option is an option but not the obligation with the holder to sell the underlying asset at a…
Q: A put option on Iowa stock specifies an exercise price of $71. Today the stock’s price is $68. The…
A:
Q: Suppose Amazon’s stock is trading for $530 per share, and Amazon pays no dividends. What is the…
A: Strike price- it is a price at which the call option can be exercised.
Q: speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium only…
A: Given: Exercise price = $15 Premium = $3
Q: You have purchased a put option on ABC common stock for $2 per contract. The option has an exercise…
A: Put option gives the investor an option to sell the stock at a given exercise price. Put option…
Ms. Co currently own a put option on Stock A with a strike price of P45. If the current price of Stock A is P40, then what is the in-the-money amount of the option?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Calculate the profit or loss per share of stock to an investor who buys a call option on a stock whose price is K90 but a call option exercise price if K100 if the stock price at expiration is K105. Calculate the profit or loss for a purchaser of a put option with the same exercise price and expiration?A trader buys a call option on a share for K2. The stock price is K25 and the strike price is K20. State the circumstances under which the trader will make a profit. State the circumstances under which the option will be exercised. Draw a diagram in support of your answers above, showing the variation of the trader’s profit with the stock price at the maturity of the option.You have purchased a put option on ABC common stock for $2 per contract. The option has an exercise price of $56. What is your net profit on this option if stock price is S45 at expiration? Moving to another question will save this response.
- You have purchased a put option on Pfizer common stock. The option has an exercise price of $45 and Pfizer's stock currently trades at $47. The option premium is $0.60 per contract. a. What is your net profit on the option if Pfizer's stock price does not change over the life of the option? b. What is your net profit on the option if Pfizer's stock price falls to $41 and you exercise the option? (For all requirements, negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) a Net profit b. Net profit per share per shareSuppose you own a call option on a stock with a strike price of $20 that expires today. The price of the underlying stock is $15. You exercise the option and immediately sell the stock. Please show a calculation of the value of your position.You have purchased a put option on ABC common stock for $3 per contract. The option has an exercise price of $54. What is your net profit on this option if stock price is $41 at expiration?
- You buy a put option on IBM common stock. The option has an exercise price of $136 and IBM’s stock currently trades at $140. The option premium is $5 per contract.a. What is your net profit on the option if IBM’s stock price increases to $150 at expiration of the option and you exercise the option? b. How much of the option premium is due to intrinsic value versus time value?c. What is your net profit if IBM’s stock price decreases to $130?d. Draw the payout diagram at maturity on a short put option position, option premium = $2, and the same exercise price... (Please give the full solution I will upvote)A call option on the stock of Bedrock Boulders has a market price of $7.The stock sells for $30 a share, and the option has a strike price of $25 ashare. What is the exercise value of the call option? What is the option’stime value?Suppose that a June call option to buy a share for $65 costs $3.5 and is held until June. Under what circumstances will the holder of the option make profit Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option.
- An investor sells a European Put on a share for $4. The stock price is $47 and the strike price is $50. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investor's profit with the stock price at the maturity of the option.Assume a stock is selling for GH¢48.50 with options available at 40, 50, and 60 strike prices.The 50 call option price is at 2.75.a. What is the intrinsic value of the 50 call?b. Is the 50 call in the money?c. Are the 40 and 60 call options in the money?A trader buys a European put on a share for K3. The stock price is K42 and the strike price is K40. State the circumstances under which the trader will make a profit. State the circumstances under which the option will be exercised. Draw a diagram in support of your answers above, showing the variation of the trader’s profit with the stock price at the maturity of the option