"TSLA price is currently at $440. You just bought 5 contracts of at-the-money straddle at strike (K) of $440 and expiry in Dec 2020 for a price of $110. What will be the payoff at expiry to your straddle position if the TSLA price at expiry is (i) $200 (ii) $450 and (iii) $1000 . 1 contract is 100 shares. Answer in integers."

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...
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"TSLA price is currently at $440. You just bought 5 contracts of at-the-money straddle at strike (K) of $440 and expiry in Dec 2020 for a price of $110. What will be the payoff at expiry to your straddle position if the TSLA price at expiry is (i) $200
(ii) $450
and (iii) $1000
. 1 contract is 100 shares. Answer in integers."
Transcribed Image Text:"TSLA price is currently at $440. You just bought 5 contracts of at-the-money straddle at strike (K) of $440 and expiry in Dec 2020 for a price of $110. What will be the payoff at expiry to your straddle position if the TSLA price at expiry is (i) $200 (ii) $450 and (iii) $1000 . 1 contract is 100 shares. Answer in integers."
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