Question
1. Apple call options strike $330.00 is trading at $127.50 today. Under what circumstances does the investor of a long call make a profit? Under
1. Apple call options strike $330.00 is trading at $127.50 today. Under what circumstances does the investor of a long call make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investors profit with the stock price at the maturity of the option. hint: K = 330 C=127.50 Long call profit: St-K-c>0 ,
2. Apple put options strike $460 is trading at $6.35 today. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investors profit with the stock price at the maturity of the option. hint: Long put: K-St-p K= 460 P=6.35
3. Explain what a market maker does? 4. Which are the most common underlying for options
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