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Posted on Jul 17, 2024

Question 5 (4 points): Following are the option prices for calls and puts for Zoom (ZM) with Nov. 20th, 2020 expiration date. Suppose that your

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Question 5 (4 points): Following are the option prices for calls and puts for Zoom (ZM) with Nov. 20th, 2020 expiration date. Suppose that your client Mary Barra is concerned about Zooms potential short-term price decline due to recent news of positive results from Gilead's Covid-19 vaccine trials. Thus, she would like to protect her investment in ZM in case of any potential price drop below the $350 per share. Currently, Mary has $1,075 in cash and also owns 100 shares of ZM that she plans to hold for a foreseeable future. Looking at call and put options, indicate the type(s) of options that you would recommend to Mary and more importantly, clearly explain your reason behind the trade(s). ZM Go 376.01 A +0.00 (0.00%) Zoom Video Communication Extended Hours: 393.00 +16.990 (4.52%) Bid: 393.00 Ask: 393.80 Volume: 156,622 Open: -- Prev Close: 376.01 Spread: -0.80 High: 393.80 Low: 377.29 Size: 1400 X 300 Expiration Type Bid Mid Ask Volume 11/20/2020 390.00 Call 14.10 14.80 15.50 Strike 0.1. Theta Delta 0.4224 429 -1.0152 Quantity & Order Type 1 Limit Limit Price Timing 0.00 A Day Add A Leg + Action Buy to Open Buy to Close Sell to Open Sell to Close Brackets Spec. Cond. Review Order Cancel Last Max Gain: N/A Break Even: N/A Max Loss: N/A Calls Nov 20, 2020 10 Strikes In the Money Basic View Calls Puts Last Trade Change Bid Midpoint Ask Volume Open Int o 0.00 37.05 0 338 35.60 38.50 0 0 0 Strikes Symbol Calls Nov 20, 2020 (Fri: 10 days) 345.00 ZM 11/20/2020 345.00 C 350.00 ZM 11/20/2020 350.00 C 355.00 ZM 11/20/2020 355.00 C 360.00 ZM 11/20/2020 360.00 C 365.00 ZM 11/20/2020 365.00 C 370.00 ZM 11/20/2020 370.00 C 375.00 ZM 11/20/2020 375.00 C 380.00 ZM 11/20/2020 380.00 C 385.00 ZM 11/20/2020 385.00 C 0.00 30.45 29.20 31.70 0 483 0.00 0 0 24.00 24.80 25.60 0 285 0.00 0 0 19.00 20.50 22.00 0 327 0.00 0 0 Last Trade Change Bid Midpoint Ask Volume Open Int 0.00 0 0 10.50 10.75 11.00 0 2,316 0.00 0 0 Strikes Symbol Puts Nov 20, 2020 (Fri: 10 days) 345.00 ZM 11/20/2020 345.00 P 350.00 ZM 11/20/2020 350.00 P 355.00 ZM 11/20/2020 355.00 P 360.00 ZM 11/20/2020 360.00 P 365.00 ZM 11/20/2020 365.00 P 370.00 ZM 11/20/2020 370.00 P 375.00 ZM 11/20/2020 375.00 P 380.00 ZM 11/20/2020 380.00 P 385.00 ZM 11/20/2020 385.00 P 13.70 14.10 14.50 0 840 0.00 0 0 18.00 18.35 18.70 0 580 0.00 0 0 22.50 22.95 23.40 0 1,206 0 0.00 0 Question 5 (4 points): Following are the option prices for calls and puts for Zoom (ZM) with Nov. 20th, 2020 expiration date. Suppose that your client Mary Barra is concerned about Zooms potential short-term price decline due to recent news of positive results from Gilead's Covid-19 vaccine trials. Thus, she would like to protect her investment in ZM in case of any potential price drop below the $350 per share. Currently, Mary has $1,075 in cash and also owns 100 shares of ZM that she plans to hold for a foreseeable future. Looking at call and put options, indicate the type(s) of options that you would recommend to Mary and more importantly, clearly explain your reason behind the trade(s). ZM Go 376.01 A +0.00 (0.00%) Zoom Video Communication Extended Hours: 393.00 +16.990 (4.52%) Bid: 393.00 Ask: 393.80 Volume: 156,622 Open: -- Prev Close: 376.01 Spread: -0.80 High: 393.80 Low: 377.29 Size: 1400 X 300 Expiration Type Bid Mid Ask Volume 11/20/2020 390.00 Call 14.10 14.80 15.50 Strike 0.1. Theta Delta 0.4224 429 -1.0152 Quantity & Order Type 1 Limit Limit Price Timing 0.00 A Day Add A Leg + Action Buy to Open Buy to Close Sell to Open Sell to Close Brackets Spec. Cond. Review Order Cancel Last Max Gain: N/A Break Even: N/A Max Loss: N/A Calls Nov 20, 2020 10 Strikes In the Money Basic View Calls Puts Last Trade Change Bid Midpoint Ask Volume Open Int o 0.00 37.05 0 338 35.60 38.50 0 0 0 Strikes Symbol Calls Nov 20, 2020 (Fri: 10 days) 345.00 ZM 11/20/2020 345.00 C 350.00 ZM 11/20/2020 350.00 C 355.00 ZM 11/20/2020 355.00 C 360.00 ZM 11/20/2020 360.00 C 365.00 ZM 11/20/2020 365.00 C 370.00 ZM 11/20/2020 370.00 C 375.00 ZM 11/20/2020 375.00 C 380.00 ZM 11/20/2020 380.00 C 385.00 ZM 11/20/2020 385.00 C 0.00 30.45 29.20 31.70 0 483 0.00 0 0 24.00 24.80 25.60 0 285 0.00 0 0 19.00 20.50 22.00 0 327 0.00 0 0 Last Trade Change Bid Midpoint Ask Volume Open Int 0.00 0 0 10.50 10.75 11.00 0 2,316 0.00 0 0 Strikes Symbol Puts Nov 20, 2020 (Fri: 10 days) 345.00 ZM 11/20/2020 345.00 P 350.00 ZM 11/20/2020 350.00 P 355.00 ZM 11/20/2020 355.00 P 360.00 ZM 11/20/2020 360.00 P 365.00 ZM 11/20/2020 365.00 P 370.00 ZM 11/20/2020 370.00 P 375.00 ZM 11/20/2020 375.00 P 380.00 ZM 11/20/2020 380.00 P 385.00 ZM 11/20/2020 385.00 P 13.70 14.10 14.50 0 840 0.00 0 0 18.00 18.35 18.70 0 580 0.00 0 0 22.50 22.95 23.40 0 1,206 0 0.00 0