You sell 2,000 put options at $3 each and 2,000 call options at $2 each. The exercise price of one put option is $50 and the exercise of one call option is $60. Calculate your total profit/loss for each of the following prices: $40, $45, $50, $55, $65 and $70.
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You sell 2,000 put options at $3 each and 2,000 call options at $2 each. The exercise price of one put option is $50 and the exercise of one call option is $60. Calculate your total
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- An organization is presented with a choice of two investment options. Option A has a 60% chance of making a profit of ₱300,000 and a 40% chance of incurring a loss of $500,000. Option B has a 70% chance of making a profit of ₱200,000 and a 30% chance of incurring a loss of ₱250,000. What is the expected profit/loss for Option A? (Put parenthesis if negative What is the expected profit/loss for Option B? (Put parenthesis if negative)The call has a premium of $10 and a strike price of $60. You decide to go on margin, meaning that you put down $8 of your own money and borrow the other $2. On the day of expiration, the underlying asset is worth $75. What is your percentage return on equity for this position?Steph creates a ratio spread by buying four 100-strike put options and selling one 110-strike put option. Graph Stephs' payoff at expiration
- A stock priced at $65 has three-month calls and puts with an exercise price of $55 available. The calls have a premium of $3.91, and the puts cost $1.6. The risk-free rate is 1.6%. If the put options are mispriced, what is the profit per option assuming no transaction costs? Bring out 4 decimal placesOne of the categories of options available to investors and speculators is LEPOs. Assuming 7.00 per cent margin, what would be the percentage return and dollar profit to an investor who purchased one LEPO (for 1000 shares) for a premium of $26 220 and later closed out the position when the LEPO premium was $28 430?You buy a put option on IBM common stock. The option has an exercise price of $136 and IBM’s stock currently trades at $140. The option premium is $5 per contract.a. What is your net profit on the option if IBM’s stock price increases to $150 at expiration of the option and you exercise the option? b. How much of the option premium is due to intrinsic value versus time value?c. What is your net profit if IBM’s stock price decreases to $130?d. Draw the payout diagram at maturity on a short put option position, option premium = $2, and the same exercise price... (Please give the full solution I will upvote)
- Option B has a 70% chance of making a profit of ₱200,000 and a 30% chance of incurring a loss of ₱250,000. What is the expected profit/loss for Option B?You need to price a put option on the stock of APPLE with an exercise price of $50 and six months to expiration. The current stock price of APPLE is $52, the risk-free rate is 10% p.a. (c.c.) and the volatility of the stock price of APPLE is 30% p.a. APPLE will pay a dividend of $1 in exactly four months’ time. This put option is to be priced using a two-period binomial option pricing model, with three months in each period. QUESTION: Draw the two-period tree diagram for the adjusted stock price (that recognizes the impact of the dividend) of APPLE. Show the expiration date payoffs from the put option.Atrader creates a long butterfy spread from options with strike prices $60, $65,and $70 by trading a total of 400 options, The options are worth $11,$14,and $18, What is the maximum net loss (after the cost of the options is taken into account? 0 $300 O $400 O $100 O $200
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