W10 Complex Instrument Excerise

Question 16?

Question 1?

1.) A put option for 1,000 XYZ Corporation shares has a total value of P12,250. Its extrinsic value is P300. If the underlying asset is currently valued at P400 per share, what is the exercise price of an XYZ share? a. P411.95 b. P288.15 c. P388.05 d. P311.85 e. None among the other choices

2) You enter into a ‘Call’ Option contract with a strike price of $20. This contract will expire in 31st of March 2021. On 31st of March, you realise that the underlying share price is $28 . a. Will you exercise this contract? Why or why not? b. Is this contract ‘In-the-Money’ or ‘Out-Of-the-Money’?

A28

Mansukh

You purchase one put option contract on AMD with an exercise price of $100 for a premium of $3.7. You hold the option until the expiration date, when AMD sells for $108 per share. One contract is on 100 shares of the underlying stock. Compute your profit. Your Answer: Answer

Suppose that a European put option to sell a share for $20.00 costs $1.00. Assume the price of the underderlying stock at expiration is S on the expiration date. Under what circumstances should the holder excercise the option. With what price the holder will make profit

You purchased a call option on TSLA with an exercise price of $180 for a premium of $5.0 and held it until the expiration date. What is your profit (per share) if the stock sells for $192 on the expiration date? Enter your answer without the dollar sign. Your Answer: Answer

You buy one, Jan 15, 2021 Alphabet Inc. (GOOG) put contract with strike price of $680 and pay a premium of $7. The put contract represents 100 shares of stock. What is the maximum net profit that you could gain from this strategy (be sure to include the cost of the option contract in your calculation)?

A call option (with shares as the underlying asset) was originally purchased for $0.91 and is now trading for $2.62. The exercise price is $35 and the underlying share is currently trading for $37.43. What is the time value of the option? A. $2.43 B. $-1.52 C. $2.62 D. $0.19

Today on August 18 Tesla Inc. stock (TSLA) trades at a spot price of $220 per share. A trader decides to buy a European call option contract (= 100 call options) on the stock with a strike price of $220 and maturity September 15 (i.e., in one month). The price of the European call option contract is $12 per option. (i) Under what circumstances does the trader make a gain on September 15? (ii) What is the maximum possible gain for the trader? (iii) What is the maximum possible loss for the trader? Provide short answers for (i). (ii), (iii).

You purchase AAPL put option with an exercise price of $120 for a premium of $4.5. You hold the option until the expiration date, when AAPL sells for $110 per share. Compute your profit per share and enter it without a dollar sign.

A put option on Iowa stock specifies an exercise price of $71. Today the stock’s price is $68. The premium on the put option is $8. Assume the option will not be exercised until maturity, if at all. Complete the following table for a speculator who purchases the put option (and currently does not own the stock)

Question 4?

1. WRE is currently trading at $120/share. You sold 8 PUT-option contracts on WRE with a strike price of $110 for $8 each. a. What will be your total $ and % gain/loss if WRE price is $130 at the expiration date? b. What will be your total $ and % gain/loss if WRE price is $115 at the expiration date? C. What will be your total $ and % gain/loss if WRE price is $100 at the expiration date?

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?

Question 11?

A call option on MSFT (Microsoft) stock has the following terms: exercise/ strike price is $305; expiration date is December 30, 2022; the option premium is $20. The investor holds this option until the expiration date. On the expiration date, MSFT share price is $355. What is the payoff the investor has on the expiration date? Assume each option contract is for 1 Microsoft share. O $50 O $O O $30 O $20

You have purchased a put option on Pfizer common stock. The option has an exercise price of $45 and Pfizer's stock currently trades at $47. The option premium is $0.60 per contract. a. What is your net profit on the option if Pfizer's stock price does not change over the life of the option? b. What is your net profit on the option if Pfizer's stock price falls to $41 and you exercise the option? (For all requirements, negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) a Net profit b. Net profit per share per share

8. Buy one July 170 put contract. Hold it until the option expires. Determine the profits and display the results in a chart (include profits for the following underlying stock prices: 130,140,150,160,170,180,190). Identify the breakeven stock price at expiration. What is the maximum possible gain and loss on the transaction?