The price of a stock is $64. A trader buys 1 put option contract (each contract is for 100 options) on the stock with a strike price of $60 when the option price is $10. When does the trader make a profit? When the stock price is below $54 When the stock price is below $60 When the stock price is below $50 When the stock price is below $64 ◄ Previous Next ▸

The price of a stock is $64. A trader buys 1 put option contract (each contract is for 100 options) on the stock with a strike price of $60 when the option price is $10. When does the trader make a profit? When the stock price is below $54 When the stock price is below $60 When the stock price is below $50 When the stock price is below $64 ◄ Previous Next ▸

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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Similar questions

solve a,b,c and d please
Suppose you own a put option on Apple stock with a strike price of $150. Suppose it is the expiration date of the option and the current stock price of Apple is $75. What payoff will you receive from making an optimal exercise decision on your option? 1. -$75 2. $0 3. $75
Covered Calls Please help me.
You purchase 20 call option contracts with a strike price of $110 and a premium of $1.85. Assume the stock price at expiration is $119.12. a. What is your dollar profit? (Do not round intermediate calculations.) Dollar profit S 14,540 b. What is your dollar profit if the stock price is $105.07? (A negative value should be indicated by a minus sign. Do not round intermediate calculations.) If the stock price is $105.07, the call is worthless so the dollar profit is $
You bought a $50 strike call option on a stock XYZ for $8.20 and then sold/wrote a $65 call option for $4.35. What price would the stock have to be at expiration for you to start losing profit?
Given the following information, price of a stock: strike price of a six-month call: market price of the call: strike price of a six-month put: market price of the put: The maximum the seller of the put can lose is $ $102 $100 $6 $100 $3
MetaAn investor buys a put option contract for S of IBM Inc. stock, with a contract size of ton shares. The stock price is currently $35, and the exercise price is $10. What are the investor's expectations, and under what conditions does the investor make a profit? (1) Is this put option in-the-money? ii) Under what circumstances will the option be exercised? (iv) If at the expiration of the option, the stock price is $ so calculate the profit/loss of the investment and explain what the transactions are? Shall the investor exercise this option?
You bought a $50 strike call option on a stock XYZ for $8.20 and then sold/wrote a $65 call option for $4.35 If the stock closes at $49 on expiration day, how much did you lose at expiration?
A collar is established by buying a share of stock for $54, buying a 6-month put option with exercise price $47, and writing a 6-month call option with exercise price $61. On the basis of the volatility of the stock, you calculate that for a strike price of $47 and expiration of 6 months, N(d1) = 0.7298, whereas for the exercise price of $61, N(d1) = 0.6374. Required: What will be the gain or loss on the collar if the stock price increases by $1? What happens to the delta of the portfolio if the stock price becomes very large? What happens to the delta of the portfolio if the stock price becomes very small?
Suppose you purchase 20 call contracts on SAMSONG Co. stock. The strike price is $120, and the premium is $8. If the stock is selling for $140, $128, $120 per share at expiration, what are your call options worth? What is your net profit?
IBM stock is currently trading at $100 per share. An investor purchases one Put option contra on IBM with a $100 strike and at a price of $3.00 per contract. Each options contract represer an interest in 100 underlying shares of stock. For each of the following scenarios determine i 7. the option is in the money, at the money, or out of the money. Show your work. A. When the option expires, IBM is trading at $98 B. When the option expires, IBM is trading at $90 C. When the option expires, IBM is trading at $97
Give typing answer with explanation and conclusion The XYZ Corporation stock currently sells for $52/share. The premium for a put option expiring in four weeks is $2.07. Suppose you buy 5 contracts of this put option. What is your maximum gain? (Hint: One option is called a contract, and each contract represents 100 shares of the underlying stock. Exchanges quote options prices in terms of the per-share price, not the total price an investor pays to own the contract.) A) $22,715 B) $26,000 C) $24,965 D) $23,750

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