Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. a. Identify the strategy employed by Dumo above. b. Tabulate the Profit to the strategy at expiration for the following - Exercise price R30; Stock price 20. - Exercise price R30; Stock price 35.

Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. a. Identify the strategy employed by Dumo above. b. Tabulate the Profit to the strategy at expiration for the following - Exercise price R30; Stock price 20. - Exercise price R30; Stock price 35.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 43P

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Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: Tabulate the Profit to the strategy at expiration for the following Exercise price R30; Stock price 20. Exercise price R30; Stock price 35. ST =20 ST =35 Stock Put (Pt) Premium Total profit
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. the put option expires in 3 months time and costs R2.50 per share. Assume a contract consists of one put option. Tabulate the Profit to the strategy at expiration for the following: I) Exercise price R30; stock 20 and Exercise price R30, stock price R35
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option.Required: b) Tabulate the Profit to the strategy at expiration for the following i. Exercise price R30; Stock price 20.ii. Exercise price R30; Stock price 35.
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Tabulate the Profit to the strategy at expiration for the following
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: Identify the strategy employed by Dumo above. Tabulate the Profit to the strategy at expiration for the following Exercise price R30; Stock price 20. Exercise price R30; Stock price 35. 4. What is the value of stock when ST=20 and ST=35
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: Identify the strategy employed by Dumo above.Tabulate the Profit to the strategy at expiration for the following Exercise price R30; Stock price 20. Exercise price R30; Stock price 35.
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: Identify the strategy employed by Dumo above. Tabulate the Profit to the strategy at expiration for the following (i)Exercise price R30; Stock price 20. (ii)Exercise price R30; Stock price 35
Dumo is a trader at ZNF Equity and has just identified a stock. UFSI Limited which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one of the UFSI stock. The put option expires in 3 months' time and costs R2.5 per share. Assume a contract consists of one put option. Identify the strategy employed by Dumo above. Tabulate the Progut to the strategy at expiration for the following, Exercise price R30 ; Stock price 20. Exercise price R30; Stock price 35.
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: Identify the strategy employed by Dumo above. Protective Put Tabulate the Profit to the strategy at expiration for the following Exercise price R30; Stock price 20. Exercise price R30; Stock price 35.
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Required: a) Identify the strategy employed by Dumo above. b) Tabulate the Profit to the strategy at expiration for the following i. Exercise price R30; Stock price 20. ii. Exercise price R30; Stock price 35.
Dumo is a trader at ZNF Equity traders and has just identified a stock, UFSI Limited, which is currently trading at R25 per share. Dumo decides to take a long position in at-the money put option and simultaneously buys one share of UFSI stock. The put option expires in 3 months’ time and costs R2.5 per share. Assume a contract consists of one put option. Tabulate the Profit to the strategy at expiration for the following Exercise price R30; Stock price 20. Exercise price R30; Stock price 35.
A trader has a put option contract allowing her to sell 100 shares of a stock for a strike price of $75. What are the terms of this put contract if... the company pays a quarterly dividend of $1/share the company pays a 20% stock dividend the company declares a 2-for-5 reverse stock split For each number, fill in the blank: The option allows the trader to sell ________ shares of stock for $_______/share.