Option Examples:

Nine months ago, you purchased $100$ shares of $BB$ stock for $$40$ per share. Today the stock is trading at $$54.$ Today, you decide to purchase a put option contract on BB with an exercise price of $$50$ and a maturity date of $3$ months. The premium paid today is $$250.$ What is the overall value of your position is $3$ months, given the following stock prices in $3$ months?

Stock price in $3$ months is $$30$

Stock price in $3$ months is $$40$

Stock price in $3$ months is $$45$

Stock price in $3$ months is $$50$

Stock price in $3$ months is $$55$

Stock price in $3$ months is $$60$

Stock price in $3$ months is $$65$

Value $of$ position $=$$

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Nine months ago, you purchased $100$ shares of $BB$ stock for $$40$ per share. Today the stock is trading at $$54.$ Today, you decide to purchase a put option contract on BB with an exercise price of $$50$ and a maturity date of $3$ months. The premium paid today is $$250.$ You also decide to write a call option contract on BB with an exercise price of $$60$ and a maturity date of $3$ months. You will receive $$150$ for writing the call option contract. What is the overall value of your position is $3$ months, given the following stock prices in $3$ months?

Stock price in $3$ months is $$30$

Stock price in $3$ months is $$40$

Stock price in $3$ months is $$45$

Stock price in $3$ months is $$50$

Stock price in $3$ months is $$55$

Stock price in $3$ months is $$60$

Stock price in $3$ months is $$65$

Value of position $=$$

Value of position $=$

Value of position $=?$

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Value of position $=$$