Basic Option Strategies Profit ComputationAssume the below prices for calls and puts: CallCallCallPutPutPutStrikeJulAugOctJulAugOct1652.75.258.12.44.756.751700.83.2565.757.59 Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190?Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=150.Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=185. Basic Option Strategies Profit ComputationAssume the below prices for calls and puts:CallPutStrikeJulAugOctJulAugOct1652.75.258.12.44.756.751700.83.2565.757.591. Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190?2. Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is theprofit/loss if ST=1853. Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and themaximum loss. What is the profit/loss if ST=150.4. Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and themaximum loss. What is the profit/loss if ST=185.

We are looking at Put option of ST Aug 170 which is available at 7.5. If the ST is goes below 170…

Answered: Buy one August 170 put contract. Hold…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter5: Financial Options

Section: Chapter Questions

Problem 3MC: Consider Triple Play’s call option with a $25 strike price. The following table contains historical...

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Basic Option Strategies Profit Computation

Assume the below prices for calls and puts:

	Call	Call	Call	Put	Put	Put
Strike	Jul	Aug	Oct	Jul	Aug	Oct
165	2.7	5.25	8.1	2.4	4.75	6.75
170	0.8	3.25	6	5.75	7.5	9

Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190?
Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185
Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=150.
Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=185.

Basic Option Strategies Profit Computation
Assume the below prices for calls and puts:
Call
Put
Strike
Jul
Aug
Oct
Jul
Aug
Oct
165
2.7
5.25
8.1
2.4
4.75
6.75
170
0.8
3.25
6
5.75
7.5
9
1. Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190?
2. Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the
profit/loss if ST=185
3. Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the
maximum loss. What is the profit/loss if ST=150.
4. Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the
maximum loss. What is the profit/loss if ST=185.

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