Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 1 Today you are writing a put option on TSLA stock, which is currently valued at $200 per share. The put option has a

image text in transcribed

QUESTION 1 Today you are writing a put option on TSLA stock, which is currently valued at $200 per share. The put option has a strike price of $178, 6 months to expiration, and currently trades at a premium of $6.1 per share. If at maturity the stock is trading at $164, what is your net profit on this position? Keep in mind that one option Covers 100 shares. QUESTION 2 Today you go long on 5 December contracts of lean hog futures, at a price of 49.3 cents per pound. One contract is for 40K pounds. One month later, December futures are trading at 42.3 cents per pound. If you close out your position at this time, what is your profit from this position? QUESTION 3 You think the price of AMZN stock, which is currently $900 is likely to change significantly over the next three months, you are just not sure which direction. So you buy a long straddle position, with a call and put option, worth $20 and $20 per share, respectively, three months to expiration, and a strike price of $900 If at expiration AMZN is trading at $894, what is your net profit on this position? Remember that option contracts come in multiples of 100 shares

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Applications In Energy Finance

Authors: Christos Floros, Ioannis Chatziantoniou

1st Edition

3030929566, 978-3030929565

More Books

Students also viewed these Finance questions

Question

Are there any questions that you want to ask?

Answered: 1 week ago