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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
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 $185, 4 months to expiration, and currently trades at a premium of $5.1 per share. If at maturity the stock is trading at $166, 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 77 cents per pound. One contract is for 40K pounds. One month later, December futures are trading at 77.6 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 $22 and $29 per share, respectively, three months to expiration, and a strike price of $900 If at expiration AMZN is trading at $872, what is your net profit on this position? Remember that option contracts come in multiples of 100 shares
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