Question
1- You bought call options on Home Depot with a strike price of $130. The option premium was $6.68. Just before the contract expired, Home
1- You bought call options on Home Depot with a strike price of $130. The option premium was $6.68. Just before the contract expired, Home Depot stock was $135 per share. Calculate your profit or loss per share.
2-You purchased call options on 1000 shares of Goldman-Sachs (GS) stock with a strike price of $240 per share. The option premium was $4 per share. Calculate the profit or loss if the market value of GS stock is (a) $250 at expiration. (b) $230 at expiration. (c) $242 at expiration.
3- A long straddle strategy involves long one call and long one put at the identical strike price. Under which situations does a trader want to take this trading strategy?
4-A butterfly strategy involves long one call with strike price (X-A), long one call with strike price (X+A), short two calls with strike X. Under which situations does a trader want to take this trading strategy?
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