Question
The Relationship between the Option Price (premium) and the Strike - In this question you will investigate how the price of a stock option is
The Relationship between the Option Price (premium) and the Strike - In this question you will investigate how the price of a stock option is affected by the Strike (K), while holding all other factors constant. You will investigate the relationship for both calls and puts.
On any day of your choice, select a company and obtain the prices of both CALLS and PUTS for 5 (or more) strikes above and 5 (or more) strikes below the current stock price for the same expiration month (use either May 2020 or June, 2020). Please ensure that there is a price for all the strikes that you choose. You may obtain the prices from Yahoo.Finance, cboe.com, stocktrak.com, or other sources.
Plot on the same graph the relationship between the Call price and the Strike and the relationship between the Put price and the Strike. Please label your graph clearly. Include both your table and your graph with your report.
Please report the stock price at the time you download the data.
Comment on your graph.
The Relationship between the Option Price (premium) and the Time to Expiration (T) -In this question you will investigate how the price of a stock option is affected by the Time to Expiration (T), while holding all other factors constant. You will investigate the relationship for both calls and puts.
On any day of your choice, for the company you selected in question 2, obtain the prices of both CALLS and PUTS for the at- (or near-the-money) strike for 5 unique expiration months (all less than a year from the day you choose). Please ensure that there is a price for all the expiration months and the strike that you choose. You must use the same strike for ALL expirations. Please do not include weeklys.
Plot on the same graph the relationship between the Call price and the Time to Expiration (in days) and the relationship between the Put price and the Time to Expiration (in days). Please label your graph clearly. Include both your table and your graph with your report.
Please report the stock price at the time you download the data.
Comment on your graph.
Please make sure to use the same stock for both. If you could also make digital graphs/tables instead of handwritten ones that would be great!
Thanks
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