QUESTION 5Suppose company XYZ's stock is trading at $53.86. You currently hold a put option with a strike price of $69.95 and premium on the option was$14.39. If today is the expiration date, how much did you gain or lose on the option? (Put the answer in as a negative if it's a loss.)

A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Answered: Suppose company XYZ's stock is trading…

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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A stock is currently priced at 43.75 when options are about to expire. What is the net profit of a CALL option with a strike price of 45 for the BUYER of the option if the premium paid was 1.75? (per share) Group of answer choices 1.75 0.00 -2.25 -1.75 45.00
You write a put with a strike price of $60 on stock that you have shorted at $60 (this is a “covered put”). What are the expiration date profits to this position for stock prices of $50, $55, $60, $65, and $70 if the put premium is $1.80? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.) Stock price Short profit Put payoff Put profit Net profit $50.00 $55.00 $60.00 $65.00 $70.00
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One month ago you purchased a put option on the S&P500 Index with an exercise price of $900.00. Today is the expiration date, and the index is at $896.46. a. Will you exercise the option? b. What will be your profit?
Question 5: Suppose that a March call option to buy a share for $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a 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.Plz explain it
A stock currently trades at $100. Consider a put and a call option written on this stock with strike price $105. Which of the following statements is most accurate? A.The call option is in-the-money and the put option is out-of-the-money B.The call option is out-of-the-money and the put option is in-the-money C.Both options are in-the-money D.Cannot determine without further information
A stock is currently selling for $39. In one period, the stock will move up by a factor of 1.29 or down by a factor of .53. A call option with a strike price of $50 is available. If the risk-free rate of interest is 2.5 percent for this period, what is the value of the call option?
You currently have a position on a covered call. A covered call is a combination of a long stock and a short call on the same stock. You purchased the stock at the price of $50 and short the call at the premium of $3. The call option has an exercise price of $55. If the stock price increases to $54, what is your net income?

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Suppose company XYZ's stock is trading at $53.86. You currently hold a put option with a strike price of $69.95 and premium on the option was $14.39. If today is the expiration date, how much did you gain or lose on the option? (Put the answer in as a negative if it's a loss.)