Suppose you purchase the July 2011 put option on orange juice futures with a strike price of $1.50. Use Table 23.2 from problem #1, below on the last page. How much does your option cost per pound of orange juice What is the total cost for one contract? Suppose the price of orange juice futures is $1.43 per pound at expiration of the option contract. What is your net profit or loss from this position? What is your net profit or loss if orange juice futures prices are $1.57 per pound at expiration?

TABLE 232 ORANGE JUICE (ICE) 15,000 lbs., cents per lb. Sample Wall Street Journal Futures Option Price Quotations Calls Puts May SouRCE: Reprinted by permission of The Wall Street Journal, 2011 Dow Jones & Company, Inc., March 30, 2011. Al Rights Reserved 7 2 5 5 2 1 Open Interest 7,147