Netflix trades at $298.50. Netflix January 10, 2020 call option with a strike price of $310 has a premium of $4.30. Is this option in the money or out of the money? Explain. A Netflix February 24 call option with a strike price of $310 (same as above) has a premium of $11.80. How do you explain the significant difference in premium between the two options? You own Netflix and are worried the stock mat react negatively to bad news. You do not want to sell the stock, but you do want to protect a profit you have realized. What option strategy is best suited for you? Explain the option you would buy or sell and be specific with a strike price. Netflix is due to report earnings on Tuesday. Their earnings have been either very good or very bad, and you are not sure what they may report, but why you do know is the stock trades sharply higher or lower depending on the report. You do not own the stock, but want to trade the news of Netflix earnings. What option strategy is best for you. Explain the specific mechanics, the cost of the strategy and what is needed to break even. Use the option table below to base your answer on: CALL STRIKE PREMIUM EXPIRATION $285.00 $14.50 12/20/2019 $300.00 $3.80 12/20/2019 $320.00 $0.25 12/20/2019 $395.00 $12.48 1/17/2020 $310.00 $5.55 1/17/2020 PUT STRIKE PREMIUM EXPIRATION $285.00 $1.10 12/20/2019 $300.00 $5.36 12/20/2019 $320.00 $21.91 12/20/2019 $295.00 $8.65 1/17/2020 $310.00 $16.80 1/17/2020
Netflix trades at $298.50.
Netflix January 10, 2020 call option with a strike price of $310 has a premium of $4.30. Is this option in the money or out of the money? Explain.
A Netflix February 24 call option with a strike price of $310 (same as above) has a premium of $11.80. How do you explain the significant difference in premium between the two options?
You own Netflix and are worried the stock mat react negatively to bad news. You do not want to sell the stock, but you do want to protect a profit you have realized. What option strategy is best suited for you? Explain the option you would buy or sell and be specific with a strike price.
Netflix is due to report earnings on Tuesday. Their earnings have been either very good or very bad, and you are not sure what they may report, but why you do know is the stock trades sharply higher or lower depending on the report. You do not own the stock, but want to trade the news of Netflix earnings. What option strategy is best for you. Explain the specific mechanics, the cost of the strategy and what is needed to break even. Use the option table below to base your answer on:
| CALL | ||
| STRIKE | PREMIUM | EXPIRATION |
| $285.00 | $14.50 | 12/20/2019 |
| $300.00 | $3.80 | 12/20/2019 |
| $320.00 | $0.25 | 12/20/2019 |
| $395.00 | $12.48 | 1/17/2020 |
| $310.00 | $5.55 | 1/17/2020 |
| PUT | ||
| STRIKE | PREMIUM | EXPIRATION |
| $285.00 | $1.10 | 12/20/2019 |
| $300.00 | $5.36 | 12/20/2019 |
| $320.00 | $21.91 | 12/20/2019 |
| $295.00 | $8.65 | 1/17/2020 |
| $310.00 | $16.80 | 1/17/2020 |
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