The price of a stock is $67. A trader sells 5 put option contracts on the stock (each contract gives the right to sell 100 shares) with a strike price of $70 when the option price is $4. At the expiration date the stock price is $69. What is the trader’s net profit or loss?

Q: e price of a stock is $44 per share, and the October put with an exercise price of $45 is selling…

A: The put option gives opportunity to sell the stock but no obligation to sell the stock on expiration…

Q: The stock price of BAC is currently $120 and a put option with strike price of $120 is $5. A trader…

A: Here,Current price is $120Strike price is $120Premium is $5Strategies:-1. 300 Shares of BAC2. 3…

Q: Give typing answer with explanation and conclusion to all parts 1. A trader has a put option…

A: An option contract is a derivative contract that allows its buyer to acquire or sell the underlying…

Q: You wrote a call option on the stock of PIGN at a strike price was $55.55. The premium you received…

A: Position of call option writer is exactly opposite of call option holder. Seller will receive option…

Q: The shares of Exxon are currently trading at $88. A “put buyer" recently paid a premium of $5 for…

A: Put Seller's Profit is limited to the premium received as the seller of an option doesn't have the…

Q: An investor purchases 25 call option contracts at a price of $1.86 and a strike price of $50. At…

A: Given: Contract price =$1.86Strike price =$50Stock price =$47.62Option purchase =25 (100 share)

Q: You purchased two $35 call contracts at $3.40 per option. You exercised the option on expiration day…

A: Call Option is a financial derivative contract which givers option buyer a right not obligation to…

Q: EStIon20 You have purchased a put option on ABC common stock for $3 per contract. The option has an…

A: Puts give the buyer the right, but not the obligation, to sell the underlying asset at the strike…

Q: A trader shorts futures contract to sell 4,000 stocks for $4.50 per stock. The initial margin is…

A: When a future contract is bought or sold, a trader is asked to keep margin balance of the total…

Q: A trader sells (or "writes", or "shorts") 100 European call options on a stock with a strike price…

A: A call option is similar to a special ticket that you buy that gives you the option (but not the…

Q: Assume a stock trades at $95, the volatility of the stock is 36%, and the risk-free interest rate is…

A: Stock price = $95Volatility = 36%Risk-free interest rate = 3.9%Strike = $101Expiring in 249 daysTo…

Q: Suppose a April put option to sell share of company for Rs 500 cost Rs 40 and is held until April.…

A: The option is the financial derivative that provides the right to sell or buys the shares at a…

Q: You purchase a call option on Stock A with an exercise price of $85 for a premium of $1.9. You hold…

A: A call option is right to purchase a stock at the strike price  when spot price is less than…

Q: A 1-year call on a stock with strike $30 costs $3; a 1-year put on the same stock with strike $30…

A: Variables in the question:1 year call option:Strike price=$30Call premium=$31 year put-option:Strike…

Q: At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put…

A: Naked option is created when the option writer (seller) does not currently own any, or enough, of…

Q: Suppose you own a call option on a stock with a strike price of $20 that expires today. The price of…

A: Call option gives the right to the owner of the option to buy an underlying asset at the price…

Q: rice of Home Depot stock is trading for $325 per share. You believe the price is too high. If the…

A: When you trade in the stock market than purchase at right price is important because other wise you…

Q: what is the maximum profit the writer of this covered call can earn if the position is held to…

A: In a covered call strategy, you buy the underlying stock and at the same time you sell a call option…

Q: You bought a $50 strike call option on a stock XYZ for $8.20 and then sold/wrote a $65 call option…

A: In this question we need to calculate the amount we made from buying call option and selling call…

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: The price of a stock is $64. A trader buys 1 put option contract (each contract is for 100 options)…

A: Put option gives the holder of option , right and not obligation to sell underlying asset at a…

Q: with each contract being on 100 shares. The option price is $10, the time to maturity is 6 months,…

A: Calculation of maximum lossMaximum loss = (Strike Price - Stock Price)  * No. of shares * Contract…

Q: Neha wrote five call option contracts with a strike price of $33.70 and an option price of $.60 per…

A: Strike price refers to the price at which an option holder can exercise his right to buy or sell the…

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: You have purchased a put option on ABC common stock for $2 per contract. The option has an exercise…

A: Put option is the right but not the obligation of the holder to sell the underlying asset at its…

Q: The share price of XYZ on April 24 is $124. A trader sells 200 put options on the stock with astrike…

A: Number of put options (N) = 200 Strike price (S) = $ 120 Option price (O) = $ 5 Price at the time of…

Q: The market price of a stock is $35.00. An investor has purchased a call option for 100 shares of…

A: Price of underlying asset = $35 Exercise price = $20 Number of shares = 100 Intrinsic value of the…

Q: A typical stock option contract is on 100 shares of stock. Suppose that you purchased a single call…

A: In a call option contract, the buyer has the right (but not the obligation) to buy a specified…

Q: The price of a stock is $60. A trader sells 1 call option contract (each contract is for 100…

A: A call option means the option to buy the stock at strike price.

Q: Given the following information, price of a stock: strike price of a six-month call: market price of…

A: A covered call refers to the strategy used by investors where they buy a stock while at the same…

Q: The bid price of Staple common stock is $18.10 and offer price is $18.62. How much will an investor…

A: The bid price is the price at which the financial institute or dealer has purchased the shares from…

Q: Today on August 18 Tesla Inc. stock (TSLA) trades at a spot price of $220 per share. A trader…

A: An agreement between a buyer and a seller to buy a specific stock at a specific price up until a…

Q: Suppose you purchase a put option to sell General Motors common stock at $80 per share in March. The…

A: The intrinsic value of a put option is the difference between the strike price and the current…

Q: Purchasing Call Options. A call option on lowa stock specifies an exercise price of $70. Today the…

A: Call option is a derivative option which gives a right to its holder to buy an underlying asset at a…

Q: A trader buys 200 put options on a stock with a strike price of $100 when the option price is $3 and…

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

Q: Explain this step by step: Gerald purchased 3 put option contracts at an option premium of $0.95…

A: Given Information 3 Put option contracts are purchased Option premium = $0.95 1.)Strike Price = $40…

Q: In follow an Ito process with >0, a stock is worth $80 today, if the price of an option that pays…

A: To price the option, we need to use the Black-Scholes formula, which is a mathematical formula used…

Q: Given the following information, price of a stock: strike price of a six-month call: market price of…

A: An option is a type of financial instrument that is based on the value of underlying securities,…

Q: Tembo holds a one-year put option on Shoprite common stock. The put option can be exercised at K50.…

A: Exercise price of put option is K50 Put premium is K3 Time period is 1 years To Find: Value of put…

Q: One of the categories of options available to investors and speculators is LEPOs. Assuming 7.00 per…

A: Derivatives refer to contract that derives their values from an underlying asset. Future contacts,…

Q: An investor has exchange-traded put options to sell 100 shares for $20. There is a $1 cash dividend…

A: A Put refers to when a seller makes a contract to sell his stock on a certain date for a certain…

Q: You purchase 20 call option contracts with a strike price of $110 and a premium of $1.85. Assume the…

A: A call option is a financial derivative that gives the holder (buyer) the right, but not the…

Q: A trader working for a financial institution sells 200 PUT option contracts (i.e. 20,000 options) on…

A: Since the new total delta is more negative than the initial delta, to maintain neutrality, the…

Q: Given the following information, price of a stock: strike price of a six-month call: market price of…

A: An option is a type of financial instrument that is based on the value of underlying securities,…

Q: (1) Is this put option in-the-money? ii) Under what circumstances will the option be exercised? (iv)…

A: A Money Market Hedge is a financial strategy employed by businesses and individuals to manage…

Q: Given the following information, price of a stock: strike price of a six-month call: market price of…

A: An option is a type of financial instrument that is based on the value of underlying securities,…

Q: The company offered its investors option contracts to buy their shares at P72 with the current price…

A: The volatility rate of options for stock price represents the fluctuations in the price of the…

Q: You purchased a call option on TSLA with an exercise price of $180 for a premium of $5.0 and held it…

A: An option is the type of derivative that allows the investor to buy or sell a stock/asset at an…