Question

You establish a straddle on Walmart using September call and put
options with a strike price of $68. The call premium is $5.15 and
the put premium is $5.90.

**a.** What is the most you can lose on this
position? **(Input the amount as positive value. Round your
answer to 2 decimal places.)**

Maximum loss $

**b.** What will be your profit or loss if Walmart
is selling for $77 in September? **(Input the amount as
positive value. Round your answer to 2 decimal
places.)**

(Click to select) Profit Loss of $

**c.** At what stock prices will you break even on
the straddle? **(Input your answers from highest to lowest to
receive credit for your answers. Round your answers to 2 decimal
places.)**

Break even prices $ and $

Answer #1

Please Answer C: You establish a straddle on Walmart using the
September call and put options with a strike price of $51. The call
premium is $4.30 and the put premium is $5.05.
a. What is the most you can lose on this position? (Input the
amount as a positive value. Round your answer to 2 decimal
places.)
Maximum loss $ 9.35
b. What will be your profit or loss if Walmart is selling for
$56 in September? (Input the...

You plan on trading options for a stock using a straddle
strategy. The stock offers a call with a strike price of $75 with a
premium of $4. It also offers a put with a strike price of $75 with
a premium of $7. Both options expire on the same day.
For what range of stock prices would the straddle lead to
loss?
For what range of stock prices would the straddle lead to
gain?
Draw the profit and price...

Suppose you buy a straddle on Zoom with a strike price of $134.
The current premium on $134 call is $7.80; the current premium on a
$134 put is $5.40.
a) Explain the payoff and profit if the stock price is $115 at
expiration.
b) Explain the payoff and profit if the stock price is $155 at
expiration.
c) What is/are the break-even stock price(s) for the
strategy?
d) Why might you engage in such a strategy?

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...

A one-month European put option on Bitcoin is with the strike
price of $8,705 is trading at $480. A one-month European call
option on Bitcoin with the strike price of $8,705 is trading at
$500. An investor longs a straddle using these options. At which
prices of Bitcoin at the maturity of the options will this investor
break even (i.e. no loss and no gain)?

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?

CoStar Group stock price is $590 and the premium for September
CoStar stock call option with strike price X=$550
is $45.30. You just wrote the call option
for C=$45.30.
1) For the option premium, how much are the intrinsic value and
time value? (4 points)
2) What would be your profit / loss if the stock price of Google
is $525 on the expiration date? (3 points)
3) What would be your profit / loss if the stock 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...

2. You buy one call with a $50 strike price for $5/option. Draw
a profit/loss graph for the call.
3. You buy one put with a $50 strike price for $5\option. Draw a
profit/loss graph for the call.
4. The trades you did in problems 2 and 3 above together
constitute a straddle. Graph the combined position from problems 2
and 3.

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?

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