Suppose you purchase the May 2017 call option on corn futures with a strike price of $3.95. Assume you purchased the option at the last price of the day. Use Table 23.2 a. How much does your option cost per bushel of corn? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) b. What is the total cost of your position? Assume each contract is for 5,000 bushels. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Suppose the price of corn is $3.73 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) d. What is your net profit or loss if corn futures prices are $4.18 per bushel at expiration? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) per bushel a. Option cost b. Total cost C. Loss d. Profit TABLE 23.2 Quotations Sample CME Group Futures Options Price HI/LOW Limit Underlying Future volume Updated | charts | Last 3314 Change | Preto 2 3772 High 376 I Low 3760 May 2017 122.909 4070) 3570 16.38.37 CT 10 Feb 2017 Type: American Options Expiration: May 2017 Strike Range: At The Money Calls Puts Prior LOW Limit Updated High LOW Price Sattis Limit Updated 153857 CT 10 Feb Lim! 360.0 54 54 55 50 53 591 Lime! 16 3802 CT 10 Feb 2017 2017 1638.37 16 38 54 CT Limit CT 10 Feb 2017 10 Feb 2017 16.3847 NO CT 702 203 91 166 -51 97 3700 85 94 31 97 917 Limit 16 38.06 CT 10 Feb 2017 10 Feb 2017 00 00 16:38:06 16,38:40 10 Feb 2017 357 171 163 141 -50 971 375.0 103 * 7 103 107 10 Feb 2017 16.38.24 16:38:37 10 Feb 2017 LIMA 00 924 150 123 47 -51 150 380.0 127 -15 145 126 144 CT 1.095 Lime/ 10 Feb 2017 16:39:07 163809 Limt 120 97 -25 125 395.0 - 175- 10 FD 2017 10 Feb 2017 16 38:47 16:38:47 CT 10 Feb 2017 195 11084 51 - 4 105 390.0 1911 - 1 207 986200 183 LIME 10 Feb 2017 16.3825 16.38.28 CT CT 10 Feb 10 Feb 2017 2017 NO 16,38:43 CT 10 Feb 2017 Limit Imit 16:38:41 CT 10 Feb 2017 010 16 39.00 16:38:47 10 Feb 2017 185 57 5544 1 57 405.0 00 10 Feb 2017 About This Report Source: CME Group (www.cmegroup.com), February 10, 2017. Suppose you purchase the May 2017 call option on corn futures with a strike price of $3.95. Assume you purchased the option at the last price of the day. Use Table 23.2 a. How much does your option cost per bushel of corn? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) b. What is the total cost of your position? Assume each contract is for 5,000 bushels. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Suppose the price of corn is $3.73 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) d. What is your net profit or loss if corn futures prices are $4.18 per bushel at expiration? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer as a positive value.) per bushel a. Option cost b. Total cost C. Loss d. Profit TABLE 23.2 Quotations Sample CME Group Futures Options Price HI/LOW Limit Underlying Future volume Updated | charts | Last 3314 Change | Preto 2 3772 High 376 I Low 3760 May 2017 122.909 4070) 3570 16.38.37 CT 10 Feb 2017 Type: American Options Expiration: May 2017 Strike Range: At The Money Calls Puts Prior LOW Limit Updated High LOW Price Sattis Limit Updated 153857 CT 10 Feb Lim! 360.0 54 54 55 50 53 591 Lime! 16 3802 CT 10 Feb 2017 2017 1638.37 16 38 54 CT Limit CT 10 Feb 2017 10 Feb 2017 16.3847 NO CT 702 203 91 166 -51 97 3700 85 94 31 97 917 Limit 16 38.06 CT 10 Feb 2017 10 Feb 2017 00 00 16:38:06 16,38:40 10 Feb 2017 357 171 163 141 -50 971 375.0 103 * 7 103 107 10 Feb 2017 16.38.24 16:38:37 10 Feb 2017 LIMA 00 924 150 123 47 -51 150 380.0 127 -15 145 126 144 CT 1.095 Lime/ 10 Feb 2017 16:39:07 163809 Limt 120 97 -25 125 395.0 - 175- 10 FD 2017 10 Feb 2017 16 38:47 16:38:47 CT 10 Feb 2017 195 11084 51 - 4 105 390.0 1911 - 1 207 986200 183 LIME 10 Feb 2017 16.3825 16.38.28 CT CT 10 Feb 10 Feb 2017 2017 NO 16,38:43 CT 10 Feb 2017 Limit Imit 16:38:41 CT 10 Feb 2017 010 16 39.00 16:38:47 10 Feb 2017 185 57 5544 1 57 405.0 00 10 Feb 2017 About This Report Source: CME Group (www.cmegroup.com), February 10, 2017
