15.a. In theory, what is the cost of a synthetic short position in Netflix? Assume you want to establish this position when S0 = $600 which was the actual stock price around 1yr ago (September-October 21). Discount rate of 15%. 6 month contract. You want this position on roughly $1mm notional value which means you need 17 contracts. Remember a cash escrow account is a cost if you need to sell an uncovered option to execute this trade. 25% volatility.

15.b. Using the put and call prices from part Q15.a, 6 months later the stock closed at $375. A) What is the payoff in $s on the option strategy and B) what is the holding period return?