Question
On March 1 st , 20XX, the bid price of a put on AAPL (strike price $205, maturity June 1 st , 20XX) is $8.98
On March 1st, 20XX, the bid price of a put on AAPL (strike price $205, maturity June 1st, 20XX) is $8.98 and the ask price $9.19.
Due to a fall in price of AAPL stock on April 14th, 20XX the bid price of the put on AAPL (strike price $205, maturity June 1st, 20XX) rises to $13.37 and the ask price to $13.65.
You had purchased 100 of the above IBM call options on March 1st, 20XX. On April 14th, 20XX you decide to sell your options (you do not follow the strategy of keeping the option because of the presence of large transactions costs).
What are your dollar profits on April 14th, 20XX after you sell your options?
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Practical Financial Management
Authors: William R. Lasher
8th edition
1305637542, 978-1305887237, 1305887239, 978-1305637542
