Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. call premiums put premiums strike jan. f

Call Premiums Put Premiums Strike Jan. Feb. Jan. Feb. 105 7.50 7.75 .50 .60 110 6.25 6.50 .65 .75 115 1.15 1.20 3.25 3.62 120 .75 .95 8.10 8.85 Suppose that you decided to set up a short strip position using the Jan....

90.2K

Verified Solution

Question

Finance

Call Premiums

Put Premiums

Strike

Jan.

Feb.

Jan.

Feb.

105

7.50

7.75

.50

.60

110

6.25

6.50

.65

.75

115

1.15

1.20

3.25

3.62

120

.75

.95

8.10

8.85

Suppose that you decided to set up a short strip position usingthe Jan. 105 options. Find your profit/loss if the stock trades for$110 when the options expire. Round intermediate steps to fourdecimals and your final answer to two decimals. Do not use thedollar sign when entering your answer.

Suppose that you decided to set up a long strap position usingthe Feb. 110 options. Find your profit/loss if the stock trades for$127 when the options expire. Round intermediate steps to fourdecimals and your final answer to two decimals. Do not use thedollar sign when entering your answer.

A hedge fund manager believed that DEF stock would be relativelystable over her investment horizon and decided to use the Feb 120options to create a straddle position based on her belief. If thestock trades for $127 when the options expire, what is herprofit/loss?

  • -90
  • 90
  • 280
  • -280
  • None of the above

Suppose that you decided to create a long strangle positionusing the 115 Feb call and the 110 Feb put when the stock pricetraded at $112. Find your profit/loss if the stock trades at $118when the options expire.

  • 105
  • -105
  • 605
  • -605
  • None of the above

Answer & Explanation Solved by verified expert
4.1 Ratings (654 Votes)
Short strip position using the Jan 105 options Short Sell ONE Call Strike 105 at premium 750 Short Sell TWO Puts Strike 105 at premium 052100 Total Premium Received7501850 Payoff for Short Call at Strike105 Assume SStock Price at expiration Payoff Min105S0 If S110 Payoff 1051105 Payoff for Short Put at Strike105 Assume SStock Price at expiration Payoff MinS1050 If S110 Payoff    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Task: Senior management asks you to recommend a decision on which project(s) to accept based on the...

Finance
Q

Referencing specific neural structures and electrochemical processes, describe the flow of information from when it is received...

Psychology
Q

93 2638 0 1715t The logistic model P t represents the percentage of 1 0...

Calculus
Q

A concert promoter sells tickets and has a marginal profit function given below where P...

Calculus
Q

Oliver, un agente de seguros y profesional independiente, decidi vender su agencia de seguros a...

Accounting
Q

Tamarisk Companys balance sheet at December 31, 2021, is presented as follows. ...

Accounting
Q

Why are the costs of plant/long term assets recovered through depreciation vs. expensed out during...

Accounting
Q

Computing and Using Common Ratios The following Information is for the year 2018 for Miller...

Accounting
Q

accounting ratios for first one write about working captial giving the information how does home...

Accounting
Q

own interest and training level. The cost of the fitness trainers is $600 per month...

Accounting
Q

Help would be very much appreciated greatly. I understand it is long for simply being...

Accounting
Q

Which of the following estimates are not always required when calculating depreciation expense? Select all...

Accounting