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The Nutrien company is the world's leading producer of potash. It produces and sells nitrogen potash and phosphate products to agricultural, industrial and feed customers
The Nutrien company is the world's leading producer of potash. It produces and sells nitrogen potash and phosphate products to agricultural, industrial and feed customers worldwide, aims to increase the profitability of its stock portfolio. Mr. KIKA, the financial director of Nutrien, decides to carry out an operation on the Toronto stock options market. For this purpose, he purchases 100 call options on Waste Connections Inc. (waste management company) on September 25, N+1, under the following conditions: exercise price: $110.00; premium: $3.20; chance: December 31 N+1. Knowing that an option concerns 10 Waste Connections Inc. securities, calculate the amount of the premium paid by the company. At the beginning of December, the company's price stabilized around $120.00.
Analyze the two possibilities then available to the company. In the event that the company exercises its options, graphically represent the result obtained according to the share price. Finally, the company decides to exercise its options when the share price is $118.30.
Calculate the profit made by the company.
The seller of the option purchased these securities for $112.45 each. Calculate the result it achieves.
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