Suppose you purchase the May 2017 call option on corn futures with a strike price of $4.05. 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 $3.81 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 $4.24 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 b. Option cost Total cost Loss Profit d. TABLE 23.2 Sample CME Group Futures Uptions Price Quotations HI/LOW Charts Change volume Updated Undenying Future May 2017 - Prior Settie 372382 3854 2 3780 122.000 470 16% 10 Feb 2017 Type: American Options Expiration: May 2017 Strike Range: At The Money Calls Puts HE Updated LOW High Updated 16 38 57 1638.02 LIE 00 360054 4 55 5053 LIME 10 Feb 10F 2017 2017 16 1854 Limit 2 235 235 193 -1 3650677 370 10 Feb 10 Feb 2017 2017 16 380 16:38:47 CT 10 Feb Limit 702 205 191 156 -51 97 370055 94 31 97 917 Limit 10 Feb 2017 2017 16 38.06 16 38 40 CT 10 Feb 2017 Limit 357 171 163 174 375.0 103 - 17 103 107 3.99 LIE 10 Feb 2017 15:38:37 16.38.24 3800127 -S 145 126 1.095 10 Feb 10 F 2017 15:39:07 16:38:09 Limit 10 FD 10 Feb 2017 2017 15 38:47 163847 CT Unit 196 110 34 51 -26 105 390. 0 194 -18 207 106 200 LIME 10 Feb 2017 10 FD 2017 163825 16 3828 243 10 Feb 10F 2017 2017 15:38:48 230 75 56 54 -21 75 4000 - 11 Limit 10 Feb 2017 DO 10 Feb 2017 15 3847 185 57 554 - 1 57 0 Limit 1639.00 CT 10 Feb 2017 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 $4.05. 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 $3.81 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 $4.24 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 b. Option cost Total cost Loss Profit d. TABLE 23.2 Sample CME Group Futures Uptions Price Quotations HI/LOW Charts Change volume Updated Undenying Future May 2017 - Prior Settie 372382 3854 2 3780 122.000 470 16% 10 Feb 2017 Type: American Options Expiration: May 2017 Strike Range: At The Money Calls Puts HE Updated LOW High Updated 16 38 57 1638.02 LIE 00 360054 4 55 5053 LIME 10 Feb 10F 2017 2017 16 1854 Limit 2 235 235 193 -1 3650677 370 10 Feb 10 Feb 2017 2017 16 380 16:38:47 CT 10 Feb Limit 702 205 191 156 -51 97 370055 94 31 97 917 Limit 10 Feb 2017 2017 16 38.06 16 38 40 CT 10 Feb 2017 Limit 357 171 163 174 375.0 103 - 17 103 107 3.99 LIE 10 Feb 2017 15:38:37 16.38.24 3800127 -S 145 126 1.095 10 Feb 10 F 2017 15:39:07 16:38:09 Limit 10 FD 10 Feb 2017 2017 15 38:47 163847 CT Unit 196 110 34 51 -26 105 390. 0 194 -18 207 106 200 LIME 10 Feb 2017 10 FD 2017 163825 16 3828 243 10 Feb 10F 2017 2017 15:38:48 230 75 56 54 -21 75 4000 - 11 Limit 10 Feb 2017 DO 10 Feb 2017 15 3847 185 57 554 - 1 57 0 Limit 1639.00 CT 10 Feb 2017 10 Feb 2017 About This Report Source: CME Group (www.cmegroup.com), February 10, 2017
