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Posted on Jul 29, 2024

Consider the following positions on the Intel stock. For each of the positions choose the strike X = $55. Choose January option. a. Long 1

Consider the following positions on the Intel stock. For each of the positions choose the strike X = $55. Choose January option.

a. Long 1 call contract.

b. Short 1 put.

Assume that you enter and close the positions at the mid point of bid-ask spread.

For each position (a-e) answer the following questions. Assume that you trade each contract on Oct 29 (i.e. enter the positions).

1. Close out your positions on Nov 5. Calculate your net dollar gain or loss.

2. Now assume that you exercise options on Nov 5. For each position compute your net gain or loss.

3. For each position draw the payoff diagram, marking the strikes and the stock price on Nov 5 clearly, as well as your payoff on Nov 5.

image text in transcribed

INTC_(INTEL CORP) 56.33 -0.42 Calls Sale 4.25 2.46 1.14 0.42 4.8 2.99 Net -0.35 -0.275 - 0.205 -0.105 -0.2 -0.235 -0.155 -0.105 Bid 4.25 2.45 1.15 0.42 4.7 2.95 1.64 0.78 Ask Vol Open Int Strikerity Puts Sale Net Bid 4.35 103 1801 19 Dec 52.50 0.67 +0.0650.65 2.5 288 4824 19 Dec 55.00 1.34 +0.1 1.33 1.19 666 4899 19 Dec 57.50 2.48 +0.125 2.52 0.45411 3254 19 Dec 60.00 4.1 +0.05 4.25 4.75 401 34021 20 Jan 52.50 1.01 +0.065 0.99 2.99 1,130 50096 20 Jan 55.00 1.76 +0.115 1.75 1.67 1,188 35941 20 Jan 57.50 2.96 +0.2 2.92 0.81 1,037 53182 20 Jan 60.00 4.6 +0.25 4.55 Ask 0.67 1.36 2.56 4.35 1.02 1.81 3.0 4.65 Vol Open Int 169 1388 1,012 9466 157 303 20 1 81 779 10641 323 10445 355 2871 48 2453 0.8 November 5 INTC_(INTEL CORP) 57.56 -0.06 Calls Net Puts Last Sale 5.22 3.21 1.61 0.64 5.75 3.71 2.18 1.11 -0.08 -0.065 -0.07 -0.025 +0.075 -0.065 -0.04 -0.015 Maturity Bid Ask Vol Open Int Strike 4.9 5.4 207 2472 19 Dec 52.50 3.15 3.3 1,466 3336 19 Dec 55.00 1.6 1.66 2,428 10118 19 Dec 57.50 0.62 6745 816 3349 19 Dec 60.00 5.6 5.7 1,007 32818 20 Jan 52.50 3.7 3.8 1,235 49180 20 Jan 55.00 2.17 2.23 648 37071 20 Jan 57.50 1.1 1.14 3,667 53788 20 Jan 60.00 Last Sale Net Bid 0.42 +0.005 0.42 0.89 +0.015 0.86 1.81 +0.035 1.75 3.18 -0.095 3.25 0.73 +0.025 0.72 1.34 +0.055 1.29 2.28 +0.05 2.22 3.47 -0.18 3.65 Ask 0.44 0. 9 1.81 3.35 0.78 1.33 2.29 3.75 Vol Open Int 178 1723 355 14283 693 1556 135 279 168 11281 414 10639 460 3050 349 2576 INTC_(INTEL CORP) 56.33 -0.42 Calls Sale 4.25 2.46 1.14 0.42 4.8 2.99 Net -0.35 -0.275 - 0.205 -0.105 -0.2 -0.235 -0.155 -0.105 Bid 4.25 2.45 1.15 0.42 4.7 2.95 1.64 0.78 Ask Vol Open Int Strikerity Puts Sale Net Bid 4.35 103 1801 19 Dec 52.50 0.67 +0.0650.65 2.5 288 4824 19 Dec 55.00 1.34 +0.1 1.33 1.19 666 4899 19 Dec 57.50 2.48 +0.125 2.52 0.45411 3254 19 Dec 60.00 4.1 +0.05 4.25 4.75 401 34021 20 Jan 52.50 1.01 +0.065 0.99 2.99 1,130 50096 20 Jan 55.00 1.76 +0.115 1.75 1.67 1,188 35941 20 Jan 57.50 2.96 +0.2 2.92 0.81 1,037 53182 20 Jan 60.00 4.6 +0.25 4.55 Ask 0.67 1.36 2.56 4.35 1.02 1.81 3.0 4.65 Vol Open Int 169 1388 1,012 9466 157 303 20 1 81 779 10641 323 10445 355 2871 48 2453 0.8 November 5 INTC_(INTEL CORP) 57.56 -0.06 Calls Net Puts Last Sale 5.22 3.21 1.61 0.64 5.75 3.71 2.18 1.11 -0.08 -0.065 -0.07 -0.025 +0.075 -0.065 -0.04 -0.015 Maturity Bid Ask Vol Open Int Strike 4.9 5.4 207 2472 19 Dec 52.50 3.15 3.3 1,466 3336 19 Dec 55.00 1.6 1.66 2,428 10118 19 Dec 57.50 0.62 6745 816 3349 19 Dec 60.00 5.6 5.7 1,007 32818 20 Jan 52.50 3.7 3.8 1,235 49180 20 Jan 55.00 2.17 2.23 648 37071 20 Jan 57.50 1.1 1.14 3,667 53788 20 Jan 60.00 Last Sale Net Bid 0.42 +0.005 0.42 0.89 +0.015 0.86 1.81 +0.035 1.75 3.18 -0.095 3.25 0.73 +0.025 0.72 1.34 +0.055 1.29 2.28 +0.05 2.22 3.47 -0.18 3.65 Ask 0.44 0. 9 1.81 3.35 0.78 1.33 2.29 3.75 Vol Open Int 178 1723 355 14283 693 1556 135 279 168 11281 414 10639 460 3050 349 2576