Question

Now is July 10. The current spot price of an underlying asset is $12. You buy five September European put option contracts with the strike price of $13. The option premium per contract is $1.2. The contract size per contract is 10. What is the moneyness of the put options when you purchased the options?

Answer #1

You buy a put option on one unit of the underlying asset. The
option has a premium of $3.50 and a strike price of $15. As the
option is about to expire, the underlying asset is worth $21.70.
What will your net payoff be?

You buy a put option with strike price of $40 and simultaneously
buy two call options with the same strike price, $40. Currently,
the market value of the underlying asset is $39. The put option
premium is $2.50 and a call option sells for $3.25. Assume that the
contract is for 1 unit of the underlying asset. Assume the interest
rate is 0%. Draw a diagram depicting the net payoff (profit
diagram) of your position at expiration as a function...

Suppose the price of an asset is $50 per unit. A Call option on
the asset with a strike price of $55 is trading in the market at a
premium of $2, a Put option on the asset with a strike price of $45
is trading in the market at a premium of $8, and a forward contract
on the asset is trading at a price of $52. All derivatives
contracts are on 1 unit of the asset and all...

1. You buy a put option with strike price of $25. Currently, the
market value of the underlying asset is $30. The put option premium
is $3.25. Assume that the contract is for 150 units of the
underlying asset. Assume the interest rate is 0%. a. What is the
intrinsic value of the put option? b. What is the time value of the
put option? c. What is your net cash flow if the market value of
the options’ underlying...

Current stock price of underlying asset = $80
Standard deviation of returns of underlying asset = 30%
Strike price of call option = $85
Time to expiry of call option = 6 months
Price of call option = $5.53
Risk-free rate = 5%
The price of a corresponding put option is closest
to
Group of answer choices
A) $3.3
B) $6.1
C) $8.4
D) $9.9
Current stock price of underlying asset = $80
Standard deviation of returns of underlying asset...

You bought a put option with a strike price of $52.50. The
underlying asset is trading for $60.55 and you paid a premium of
$1.10. What is the most you could lose from this strategy?

Consider a European put option with the underlying security spot
price being $100, strike pricing being $90, and time to maturity
being one year. We also know that N(d1) = 0.75 and N(d2) = 0.7, and
we further assume zero interest rates and zero dividends for this
question. (a) (10) Compute the Black-Scholes (i) value and (ii)
delta of the European put option.

-Suppose the underlying stock is priced at $23.5, you perform
the following 4 options trades: Buy a call option with strike price
of 27.5 at $1.5 Sell a call option with strike price of 25 at $2
Buy a put option with strike price of 20 at $1.5 Sell a put option
with strike price of 22.5 at $1.5 Draw the net payoff diagram of
the strategy and explain in what direction of the market this
strategy will be profitable?

Consider a put and a call, both on the same underlying stock
that has present price of $34. Both options have
the same identical strike price of $32 and
time-to-expiration of 200 days. Assume that there
are no dividends expected for the coming year on the stock, the
options are all European, and the interest rate is
10%. If the put premium is $7.00
and the call premium is $12.00, which portfolio
would yield arbitrage profits? Hint: Check your answer...

You buy a call option and buy a put option on bond X. The strike
price of the call option is $90 and the strike price of the put
option is $105. The call option premium is $5 and the put option
premium is $2. Both options can be exercised only on their
expiration date, which happens to be the same for the call and the
put.
If the price of bond X is $100 on the expiration date, your...

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