The Uber stock (UBER) is up 20% on Tuesday, January 6, 2022, due to news of an upcoming acquisition by Facebook. MATT sold the UBER 65 Call option expiring on 01/12/2022 (i.e., in SIX days) for $0.09/share. Matt bought the UBER 25 Put option expiring on 01/19/2022 at $1.67/share. UBER stock was trading at about $30/share at the time when these options were traded. Why sell the UBER 65 call option for $0.09/share? Under what condition will Matt earn a profit?
The Uber stock (UBER) is up 20% on Tuesday, January 6, 2022, due to news of an upcoming acquisition by Facebook. MATT sold the UBER 65 Call option expiring on 01/12/2022 (i.e., in SIX days) for $0.09/share. Matt bought the UBER 25 Put option expiring on 01/19/2022 at $1.67/share. UBER stock was trading at about $30/share at the time when these options were traded. Why sell the UBER 65 call option for $0.09/share? Under what condition will Matt earn a profit?
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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The Uber stock (UBER) is up 20% on Tuesday, January 6, 2022, due to news of an upcoming acquisition by Facebook.
MATT sold the UBER 65 Call option expiring on 01/12/2022 (i.e., in SIX days) for $0.09/share.
Matt bought the UBER 25 Put option expiring on 01/19/2022 at $1.67/share.
UBER stock was trading at about $30/share at the time when these options were traded.
Why sell the UBER 65 call option for $0.09/share? Under what condition will Matt earn a profit?
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