Options On Nov 27 2019, the stock of Tesla Ine (NASDAQ: TSLA) was traded at around $330 a share. You specu- lated that the stock price of TSLA would soar in the near future after reading several positive news about the company, and you purchased 10 contracts of call options with a strike price of $630 and expiration date on June 19 2020, at a price $185 per contract. Option contracts are 100 shares per contract. In other words, you spent $1,850 on these options and then owned the right to buy 1000 shares of TSLA stocks on June 19 2020 at a cost of $630 per share. 1. If you were to exercise/sell these options on the expiration date, at what price the TSLA stock must be traded for you to break even on this speculative trade? 630 +1.85 6311.85 price at which Tesla mort trake on the lath to breare eres 2. On June 19 2020, a share of TSLA stock was traded right around $100 before the market closed. Imagine you sold all 10 contracts at that moment, what would be the total gains from holding these call options and what would be the rate of return? , oo-631.85 =3 68,15 368.15 X 1,000 total gains 368, 15o) (E = 308150/1850 8100 = 199 20% Suppose you own 100 shares of stock of Apple Ine (NASDAQ: AAPL) at a cost basis of $90 per share. On October 12 2020, the stock was traded slightly above $120 per share. Assume this is the only position in your stock portfolio 3. You want to hold APPL stocks for the long-term, but you are concerned that the price of APPL might go down in the next few months and you want to protect the profits you already made on the stock. Specifically, you want to malce sure you will be able sell the stocks for at least $110 per share or higher by the year end (Dec 18 2020). What kind of option (including the strike price) should you purchase? Option contracts are 100 shares per contract. 4. You buy the option in the previous part at a price of $350 per contract and hold it until the expiration date. Calculate the total gains/losses on this option purchase if APPL is traded at (1) $140/share and (2) $95/share on Dec 18 2020, respectively. 5. Suppose you don't currently own any APPL stocks, but you are happy to buy some shares if the stock price drops to $100/share. What kind of options (including the strike price) should you buy/sell