Suppose you purchase the May 2017 put option on corn futures with a strike price of $3.80. Assume your purchase was at the last price. Use Table 23.2 a. How much does your option cost per bushel of corn? (Round your answer to 5 decimal places, e.g., 32.16161.) b. What is the total cost for one contract? 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 futures is $3.64 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is your net profit or loss if corn futures prices are $4.01 per bushel at expiration? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is complete but not entirely correct. a. Option cost $ 0.01288 per bushel b. Total cost $ 643.75 C. Profit $ 456.25 X d. Loss S 643.75 TABLE 23.2 Sample CME Group Futures Options Price Quotations HI/LOW Undanying Future Charts Last Prior Sette Change High LOW volume 4070 Updated 163837 CT 10 Feb 2017 May 2017 3814 3772 122.909 350 3760 Type: American Options Expiration: May 2017 Strike Range At The Money Calls Puts HI LOW Limit stre Prior Settle Change Prior Sattle HII LOW Volume Limit Updated Volume High LOW Last Price Last Change LON High Updated 16:38:57 CT 10 Feb No LIME 00 231 274 237 3600 51 55 50 53 No 591 Lim 00 16 3802 CT 10 Feb 2017 2017 16.38.37 CT 10 Feb 2017 No Limt 00 No 676 Limit 2 235 195 235 3650 67 73 163854 CT 10 Feb 2017 163847 10 Feb 2017 No Limit 702 205 191 165 197 370.0 85 06 81 97 No 917 Limit 00 16 3806 CT 10 Feb 2017 16:38:40 CT 10 Feb 2017 NO LIME 00 357 171 163 171 375.0 103 -14 117 103 107 NO 3.949 LIME 00 163806 CT 10 Feb 2017 16:38:37 CT 10 Feb 2017 NO Limit 00 924 150 123 117 150 3000 145 126 161 NO 1095 Limit 00 16 38.24 CT 10 Feb 2017 16.39.07 CT 10 Feb 2017 NO Limt 00 44 125 120 97 125 3850 175 NO 0 Limit 00 16 3809 CT 10 FD 2017 Suppose you purchase the May 2017 put option on corn futures with a strike price of $3.80. Assume your purchase was at the last price. Use Table 23.2 a. How much does your option cost per bushel of corn? (Round your answer to 5 decimal places, e.g., 32.16161.) b. What is the total cost for one contract? 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 futures is $3.64 per bushel at expiration of the option contract. What is your net profit or loss from this position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is your net profit or loss if corn futures prices are $4.01 per bushel at expiration? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is complete but not entirely correct. a. Option cost $ 0.01288 per bushel b. Total cost $ 643.75 C. Profit $ 456.25 X d. Loss S 643.75 TABLE 23.2 Sample CME Group Futures Options Price Quotations HI/LOW Undanying Future Charts Last Prior Sette Change High LOW volume 4070 Updated 163837 CT 10 Feb 2017 May 2017 3814 3772 122.909 350 3760 Type: American Options Expiration: May 2017 Strike Range At The Money Calls Puts HI LOW Limit stre Prior Settle Change Prior Sattle HII LOW Volume Limit Updated Volume High LOW Last Price Last Change LON High Updated 16:38:57 CT 10 Feb No LIME 00 231 274 237 3600 51 55 50 53 No 591 Lim 00 16 3802 CT 10 Feb 2017 2017 16.38.37 CT 10 Feb 2017 No Limt 00 No 676 Limit 2 235 195 235 3650 67 73 163854 CT 10 Feb 2017 163847 10 Feb 2017 No Limit 702 205 191 165 197 370.0 85 06 81 97 No 917 Limit 00 16 3806 CT 10 Feb 2017 16:38:40 CT 10 Feb 2017 NO LIME 00 357 171 163 171 375.0 103 -14 117 103 107 NO 3.949 LIME 00 163806 CT 10 Feb 2017 16:38:37 CT 10 Feb 2017 NO Limit 00 924 150 123 117 150 3000 145 126 161 NO 1095 Limit 00 16 38.24 CT 10 Feb 2017 16.39.07 CT 10 Feb 2017 NO Limt 00 44 125 120 97 125 3850 175 NO 0 Limit 00 16 3809 CT 10 FD 2017
