Question

An investor purchases one call option (strike price $43 and premium $1.20) and purchases 3 put...

An investor purchases one call option (strike price $43 and premium $1.20) and purchases 3 put options (strike price $43 and premium $1.65) on the same underlying stock. What is the investor's total profit or loss (enter profit as positive or a loss as a negative value) per share if the stock price at expiration is $21.15?

Homework Answers

Answer #1

CALCULATION OF PROFIT/LOSS ON OPTIONS -

Profit on options purchase = $37.55

Please upvote the answer if it was of help to you.

Incase of any doubt, please comment below. I would be happy to help.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An investor writes a put option with exercise (strike) price of $80 and buys a put...
An investor writes a put option with exercise (strike) price of $80 and buys a put with exercise price of $65. The puts sell for $8 and $3 respectively. If the options are on the same stock with the same expiration date, i. Draw the payoff and profit/loss diagrams for the above strategy at expiration date of options ii. Calculate the breakeven point for this strategy and discuss whether the investor is bullish or bearish on the underlying stock.
You buy a call option and buy a put option on bond X. The strike price...
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...
1. A put option has strike price $75 and 3 months to expiration. The underlying stock...
1. A put option has strike price $75 and 3 months to expiration. The underlying stock price is currently $71. The option premium is $10. "What is the time value of the put option? Would this just be 0? Or: 71-75=-4 then 10-(-4)= 14? 2. The spot price of the market index is $900. After 3 months, the market index is priced at $920. An investor had a long call option on the index at a strike price of $930...
A call option with a strike price of $1.30/€ and a premium of $0.03/€ is executed...
A call option with a strike price of $1.30/€ and a premium of $0.03/€ is executed as the market price is $1.39/€. The buyer of the option has purchased ten contracts (one contract is for €12,500). The total profit amounts to: Question options: €7,500 $7,500 €11,250 $11,250 Question 16 (1 point) Saved A trader holds a European put option with a strike price off $1.30/€ and a premium of $0.05/€. At the expiration date the market rate is $1.40/€. What...
1. You buy a put option with strike price of $25. Currently, the market value of...
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...
Suppose a trader buys a call option with a strike price of $30 and a premium...
Suppose a trader buys a call option with a strike price of $30 and a premium of $3.03. When the option was purchased (three months previous), the stock traded for $31/share. At expiration, the stock traded for $38/share. What is the traders net profit or loss, per share? (Type just the number to two decimal places in the response box, without commas, dollar signs or percent signs. Do not enter commas but use negative sign if necessary
You buy a put option with strike price of $40 and simultaneously buy two call options...
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 that an investor initially purchases put options on 4000 Apple shares with an exercise price...
Suppose that an investor initially purchases put options on 4000 Apple shares with an exercise price of 100 dollars per share. The cost of the put option is 10 dollars per share. Then at a later date, she purchases call options on 3000 Apple shares with an exercise price of 120 dollars per share and the same expiration date as the put options above. The cost of the call option is 7 dollars per share. a) Determine the total cost...
3. Suppose you buy a call and put option that has the same strike price of...
3. Suppose you buy a call and put option that has the same strike price of $75 and same maturity. Call costs $5 and put costs $4. Graph the profits and losses at expiration for different stock prices? (You need to draw call and put in the same graph) If the stock price at maturity is $80, what is your profit or loss?
-You wrote a put option on AAPL stock with a strike price of $140 and a...
-You wrote a put option on AAPL stock with a strike price of $140 and a put premium of $17.35. The stock price at expiration is $115.00. What is your profit or loss? - You bought a put option on the SPY ETF with a strike price of $195 and a put premium of $0.95. The stock price at expiration is $190.50. What is your profit or loss? -You took a “bear spread” position on the VXX EFT by buying...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT