Question
please type the answer by computer, so i can see it clearly, thank you!!! You want to trade stock options using HSBC as the underlying
please type the answer by computer, so i can see it clearly, thank you!!!
You want to trade stock options using HSBC as the underlying asset, so you go to a reputed worldwide bank's website. The following information is available concerning the option premium:
Question:
1(a) You believe that HSBC stock price will go up in coming 3 months because global central banks will ease their monetary policies and you decide to buy the option with strike $50. What option you will buy? Explain.
1(b) Draw the profit diagram at expiration for option you have bought in 1(a).
Ask Call option Expiration August 2022 August 2022 Strike Bid 50 1.50 1.80 52 1.40 1.60 Strike Bid Ask Put option Expiration August 2022 August 2022 50 0.85 1.15 52 0.90 1.20 Ask Call option Expiration August 2022 August 2022 Strike Bid 50 1.50 1.80 52 1.40 1.60 Strike Bid Ask Put option Expiration August 2022 August 2022 50 0.85 1.15 52 0.90 1.20Step by Step Solution
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