The table below shows the prices of call and puts at different strike prices of options on Alphabet Inc. (GOOG) on 12th February, 2021. The expiration of all options are same - June 18, 2021. The market price of the GOOG stock on 12th February, 2021 is $2,092.91. Remember to make buy /sell decisions of options based on bid/ask prices (not last prices).

If you feel the Stock price is more likely to go up to $3,000 rather than down to $1,800 when you choose options with strike price of 2,100.

Explain which strategy ((spread (bull/bear/box/butterfly) or straddle or strangle or strip/strap) would best serve you and calculate the payoff and profit of that strategy?

A B D E F . | J Last Price Bid Ask Volume 1 Type 2 Call 3 Call 4. Call 5 Call 3 Strike 1800 1820 1840 Open Interest 618 100 53 337.72 324 306.77 287.8 339.5 323.5 309.6 Change % Change -4.28 -1.25% 0 101.61 348.4 332.1 316 2 49.53% 3 1860 300 1 231 294.3 279.6 -26.1 28.6 285.7 286.8 -8.31% 11.12% 8.96% 2 1880 1900 120 266.1 273.2 24.02 1 307 6 Call 7 Call 8 Call 9 Call 10 Call 1920 251.8 292.12 261.16 218 0 2 Contract Name GOOG210618001800000 GOOG210618001820000 GOOG210618001840000 GOOG210618C01860000 GOOG210618001880000 GOOG210618C01900000 GOOG210618C01920000 GOOG210618C01940000 GOOG210618C01960000 GOOG210618C01980000 GOOG210618C02000000 GOOG210618C02100000 GOOG210618002200000 GOOG210618C02300000 GOOG210618C02800000 442 Last Trade Date 2021-02-08 3:11PM EST 2021-02-03 11:11AM EST 2021-02-08 3:11PM EST 2021-02-03 2:13PM EST 2021-02-04 11:04AM EST 2021-02-05 3:33PM EST 2021-02-03 3:43PM EST 2021-02-03 9:40AM EST 2021-02-05 1:51PM EST 2021-02-04 10:37AM EST 2021-02-05 3:00PM EST 2021-02-08 3:48PM EST 2021-02-08 3:26PM EST 2021-02-08 11:44AM EST 2021-02-04 12:05PM EST 258.4 245.2 237 0 - 2 41 1940 1960 231 224 234 0 - 2 133 221.18 211.5 219.5 27.83 14.39% 1 87 1980 2000 2100 200 5 202.25 146 520 764 18 11 Call 12 Call 73 Call 14 Call 15 Call 16 Call 0 -4.1 -3.4 -4.74 209 154.2 108.7 79.2 13.9 2200 2300 2800 11 145.5 102.5 73.1 12.5 106.6 70 12.25 766 -2.73% -3.09% -6.34% 19 257 55 0 2 A B D E F G H J K Open Interest Last Trade Date Strike Last Price Bid Ask Volume 1800 7 338 48 51.6 1 75 1820 1840 1860 1880 19 50 52.7 57.4 62.8 68.2 75.2 49.8 57.3 61.2 63.6 69 56.1 60.5 3 1 28 Change % Change -4.2 -7.75% -2.2 -4.01% -7.6 -11.69% 0.1 0.16% -14.4 -17.43% 1.4 1.90% 3.2 4.00% -73.3 -45.11% 66.7 4 22 71.6 75 1 319 1900 1920 83.2 77.5 1 1 Type 17 Put 18 Put 19 Put 20 Put 21 Put 22 Put 23 Put 24 Put 25 Put 26 Put 27 Put 28 Put 29 Put 80 Put 31 Put 7 17 Contract Name GOOG210618P01800000 GOOG210618P01820000 GOOG210618P01840000 GOOG210618P01860000 GOOG210618P01880000 GOOG210618P01900000 GOOG210618P01920000 GOOG210618P01940000 GOOG210618P01960000 GOOG210618P01980000 GOOG210618P02000000 GOOG210618P02100000 GOOG210618P02200000 GOOG210618P02300000 GOOG210618P02800000 2021-02-08 11:27AM EST 2021-02-05 12:29PM EST 2021-02-03 10:15AM EST 2021-02-08 10:32AM EST 2021-02-08 10:52AM EST 2021-02-08 12:11PM EST 2021-02-08 11:57AM EST 2021-02-08 12:00PM EST 2021-02-08 10:28AM EST 2021-02-08 3:45PM EST 2021-02-08 1:24PM EST 2021-02-08 10:19AM EST 2021-02-05 10:12AM EST 2021-02-05 3:25PM EST 2021-02-01 9:35AM EST 80.9 87.4 1940 89.2 84 3 6 1960 93.9 0.7 1 49 90.4 96.1 94.7 102.5 1980 1 2 102.8 110 153.25 105.8 1.1 2000 2100 51 0.75% 0.98% 1.01% -1.64% -11.60% 110.1 156.4 28 45 23 151.9 -2.55 7 2200 200 208.1 -26.25 1 4 213.9 281.8 2300 274.8 4 9 280.8 935 0 0 2800 712.2 722 1 1 A B D E F . | J Last Price Bid Ask Volume 1 Type 2 Call 3 Call 4. Call 5 Call 3 Strike 1800 1820 1840 Open Interest 618 100 53 337.72 324 306.77 287.8 339.5 323.5 309.6 Change % Change -4.28 -1.25% 0 101.61 348.4 332.1 316 2 49.53% 3 1860 300 1 231 294.3 279.6 -26.1 28.6 285.7 286.8 -8.31% 11.12% 8.96% 2 1880 1900 120 266.1 273.2 24.02 1 307 6 Call 7 Call 8 Call 9 Call 10 Call 1920 251.8 292.12 261.16 218 0 2 Contract Name GOOG210618001800000 GOOG210618001820000 GOOG210618001840000 GOOG210618C01860000 GOOG210618001880000 GOOG210618C01900000 GOOG210618C01920000 GOOG210618C01940000 GOOG210618C01960000 GOOG210618C01980000 GOOG210618C02000000 GOOG210618C02100000 GOOG210618002200000 GOOG210618C02300000 GOOG210618C02800000 442 Last Trade Date 2021-02-08 3:11PM EST 2021-02-03 11:11AM EST 2021-02-08 3:11PM EST 2021-02-03 2:13PM EST 2021-02-04 11:04AM EST 2021-02-05 3:33PM EST 2021-02-03 3:43PM EST 2021-02-03 9:40AM EST 2021-02-05 1:51PM EST 2021-02-04 10:37AM EST 2021-02-05 3:00PM EST 2021-02-08 3:48PM EST 2021-02-08 3:26PM EST 2021-02-08 11:44AM EST 2021-02-04 12:05PM EST 258.4 245.2 237 0 - 2 41 1940 1960 231 224 234 0 - 2 133 221.18 211.5 219.5 27.83 14.39% 1 87 1980 2000 2100 200 5 202.25 146 520 764 18 11 Call 12 Call 73 Call 14 Call 15 Call 16 Call 0 -4.1 -3.4 -4.74 209 154.2 108.7 79.2 13.9 2200 2300 2800 11 145.5 102.5 73.1 12.5 106.6 70 12.25 766 -2.73% -3.09% -6.34% 19 257 55 0 2 A B D E F G H J K Open Interest Last Trade Date Strike Last Price Bid Ask Volume 1800 7 338 48 51.6 1 75 1820 1840 1860 1880 19 50 52.7 57.4 62.8 68.2 75.2 49.8 57.3 61.2 63.6 69 56.1 60.5 3 1 28 Change % Change -4.2 -7.75% -2.2 -4.01% -7.6 -11.69% 0.1 0.16% -14.4 -17.43% 1.4 1.90% 3.2 4.00% -73.3 -45.11% 66.7 4 22 71.6 75 1 319 1900 1920 83.2 77.5 1 1 Type 17 Put 18 Put 19 Put 20 Put 21 Put 22 Put 23 Put 24 Put 25 Put 26 Put 27 Put 28 Put 29 Put 80 Put 31 Put 7 17 Contract Name GOOG210618P01800000 GOOG210618P01820000 GOOG210618P01840000 GOOG210618P01860000 GOOG210618P01880000 GOOG210618P01900000 GOOG210618P01920000 GOOG210618P01940000 GOOG210618P01960000 GOOG210618P01980000 GOOG210618P02000000 GOOG210618P02100000 GOOG210618P02200000 GOOG210618P02300000 GOOG210618P02800000 2021-02-08 11:27AM EST 2021-02-05 12:29PM EST 2021-02-03 10:15AM EST 2021-02-08 10:32AM EST 2021-02-08 10:52AM EST 2021-02-08 12:11PM EST 2021-02-08 11:57AM EST 2021-02-08 12:00PM EST 2021-02-08 10:28AM EST 2021-02-08 3:45PM EST 2021-02-08 1:24PM EST 2021-02-08 10:19AM EST 2021-02-05 10:12AM EST 2021-02-05 3:25PM EST 2021-02-01 9:35AM EST 80.9 87.4 1940 89.2 84 3 6 1960 93.9 0.7 1 49 90.4 96.1 94.7 102.5 1980 1 2 102.8 110 153.25 105.8 1.1 2000 2100 51 0.75% 0.98% 1.01% -1.64% -11.60% 110.1 156.4 28 45 23 151.9 -2.55 7 2200 200 208.1 -26.25 1 4 213.9 281.8 2300 274.8 4 9 280.8 935 0 0 2800 712.2 722 1 1

Question

The table below shows the prices of call and puts at different strike prices of options on Alphabet Inc. (GOOG) on 12th February, 2021. The expiration of all options are same - June 18, 2021. The market price of the GOOG stock on 12th February, 2021 is $2,092.91. Remember to make buy /sell decisions of options based on bid/ask prices (not last prices).

If you feel the Stock price is more likely to go up to $3,000 rather than down to $1,800 when you choose options with strike price of 2,100.

Explain which strategy ((spread (bull/bear/box/butterfly) or straddle or strangle or strip/strap) would best serve you and calculate the payoff and profit of that strategy?

image text in transcribed

A B D E F . | J Last Price Bid Ask Volume 1 Type 2 Call 3 Call 4. Call 5 Call 3 Strike 1800 1820 1840 Open Interest 618 100 53 337.72 324 306.77 287.8 339.5 323.5 309.6 Change % Change -4.28 -1.25% 0 101.61 348.4 332.1 316 2 49.53% 3 1860 300 1 231 294.3 279.6 -26.1 28.6 285.7 286.8 -8.31% 11.12% 8.96% 2 1880 1900 120 266.1 273.2 24.02 1 307 6 Call 7 Call 8 Call 9 Call 10 Call 1920 251.8 292.12 261.16 218 0 2 Contract Name GOOG210618001800000 GOOG210618001820000 GOOG210618001840000 GOOG210618C01860000 GOOG210618001880000 GOOG210618C01900000 GOOG210618C01920000 GOOG210618C01940000 GOOG210618C01960000 GOOG210618C01980000 GOOG210618C02000000 GOOG210618C02100000 GOOG210618002200000 GOOG210618C02300000 GOOG210618C02800000 442 Last Trade Date 2021-02-08 3:11PM EST 2021-02-03 11:11AM EST 2021-02-08 3:11PM EST 2021-02-03 2:13PM EST 2021-02-04 11:04AM EST 2021-02-05 3:33PM EST 2021-02-03 3:43PM EST 2021-02-03 9:40AM EST 2021-02-05 1:51PM EST 2021-02-04 10:37AM EST 2021-02-05 3:00PM EST 2021-02-08 3:48PM EST 2021-02-08 3:26PM EST 2021-02-08 11:44AM EST 2021-02-04 12:05PM EST 258.4 245.2 237 0 - 2 41 1940 1960 231 224 234 0 - 2 133 221.18 211.5 219.5 27.83 14.39% 1 87 1980 2000 2100 200 5 202.25 146 520 764 18 11 Call 12 Call 73 Call 14 Call 15 Call 16 Call 0 -4.1 -3.4 -4.74 209 154.2 108.7 79.2 13.9 2200 2300 2800 11 145.5 102.5 73.1 12.5 106.6 70 12.25 766 -2.73% -3.09% -6.34% 19 257 55 0 2 A B D E F G H J K Open Interest Last Trade Date Strike Last Price Bid Ask Volume 1800 7 338 48 51.6 1 75 1820 1840 1860 1880 19 50 52.7 57.4 62.8 68.2 75.2 49.8 57.3 61.2 63.6 69 56.1 60.5 3 1 28 Change % Change -4.2 -7.75% -2.2 -4.01% -7.6 -11.69% 0.1 0.16% -14.4 -17.43% 1.4 1.90% 3.2 4.00% -73.3 -45.11% 66.7 4 22 71.6 75 1 319 1900 1920 83.2 77.5 1 1 Type 17 Put 18 Put 19 Put 20 Put 21 Put 22 Put 23 Put 24 Put 25 Put 26 Put 27 Put 28 Put 29 Put 80 Put 31 Put 7 17 Contract Name GOOG210618P01800000 GOOG210618P01820000 GOOG210618P01840000 GOOG210618P01860000 GOOG210618P01880000 GOOG210618P01900000 GOOG210618P01920000 GOOG210618P01940000 GOOG210618P01960000 GOOG210618P01980000 GOOG210618P02000000 GOOG210618P02100000 GOOG210618P02200000 GOOG210618P02300000 GOOG210618P02800000 2021-02-08 11:27AM EST 2021-02-05 12:29PM EST 2021-02-03 10:15AM EST 2021-02-08 10:32AM EST 2021-02-08 10:52AM EST 2021-02-08 12:11PM EST 2021-02-08 11:57AM EST 2021-02-08 12:00PM EST 2021-02-08 10:28AM EST 2021-02-08 3:45PM EST 2021-02-08 1:24PM EST 2021-02-08 10:19AM EST 2021-02-05 10:12AM EST 2021-02-05 3:25PM EST 2021-02-01 9:35AM EST 80.9 87.4 1940 89.2 84 3 6 1960 93.9 0.7 1 49 90.4 96.1 94.7 102.5 1980 1 2 102.8 110 153.25 105.8 1.1 2000 2100 51 0.75% 0.98% 1.01% -1.64% -11.60% 110.1 156.4 28 45 23 151.9 -2.55 7 2200 200 208.1 -26.25 1 4 213.9 281.8 2300 274.8 4 9 280.8 935 0 0 2800 712.2 722 1 1 A B D E F . | J Last Price Bid Ask Volume 1 Type 2 Call 3 Call 4. Call 5 Call 3 Strike 1800 1820 1840 Open Interest 618 100 53 337.72 324 306.77 287.8 339.5 323.5 309.6 Change % Change -4.28 -1.25% 0 101.61 348.4 332.1 316 2 49.53% 3 1860 300 1 231 294.3 279.6 -26.1 28.6 285.7 286.8 -8.31% 11.12% 8.96% 2 1880 1900 120 266.1 273.2 24.02 1 307 6 Call 7 Call 8 Call 9 Call 10 Call 1920 251.8 292.12 261.16 218 0 2 Contract Name GOOG210618001800000 GOOG210618001820000 GOOG210618001840000 GOOG210618C01860000 GOOG210618001880000 GOOG210618C01900000 GOOG210618C01920000 GOOG210618C01940000 GOOG210618C01960000 GOOG210618C01980000 GOOG210618C02000000 GOOG210618C02100000 GOOG210618002200000 GOOG210618C02300000 GOOG210618C02800000 442 Last Trade Date 2021-02-08 3:11PM EST 2021-02-03 11:11AM EST 2021-02-08 3:11PM EST 2021-02-03 2:13PM EST 2021-02-04 11:04AM EST 2021-02-05 3:33PM EST 2021-02-03 3:43PM EST 2021-02-03 9:40AM EST 2021-02-05 1:51PM EST 2021-02-04 10:37AM EST 2021-02-05 3:00PM EST 2021-02-08 3:48PM EST 2021-02-08 3:26PM EST 2021-02-08 11:44AM EST 2021-02-04 12:05PM EST 258.4 245.2 237 0 - 2 41 1940 1960 231 224 234 0 - 2 133 221.18 211.5 219.5 27.83 14.39% 1 87 1980 2000 2100 200 5 202.25 146 520 764 18 11 Call 12 Call 73 Call 14 Call 15 Call 16 Call 0 -4.1 -3.4 -4.74 209 154.2 108.7 79.2 13.9 2200 2300 2800 11 145.5 102.5 73.1 12.5 106.6 70 12.25 766 -2.73% -3.09% -6.34% 19 257 55 0 2 A B D E F G H J K Open Interest Last Trade Date Strike Last Price Bid Ask Volume 1800 7 338 48 51.6 1 75 1820 1840 1860 1880 19 50 52.7 57.4 62.8 68.2 75.2 49.8 57.3 61.2 63.6 69 56.1 60.5 3 1 28 Change % Change -4.2 -7.75% -2.2 -4.01% -7.6 -11.69% 0.1 0.16% -14.4 -17.43% 1.4 1.90% 3.2 4.00% -73.3 -45.11% 66.7 4 22 71.6 75 1 319 1900 1920 83.2 77.5 1 1 Type 17 Put 18 Put 19 Put 20 Put 21 Put 22 Put 23 Put 24 Put 25 Put 26 Put 27 Put 28 Put 29 Put 80 Put 31 Put 7 17 Contract Name GOOG210618P01800000 GOOG210618P01820000 GOOG210618P01840000 GOOG210618P01860000 GOOG210618P01880000 GOOG210618P01900000 GOOG210618P01920000 GOOG210618P01940000 GOOG210618P01960000 GOOG210618P01980000 GOOG210618P02000000 GOOG210618P02100000 GOOG210618P02200000 GOOG210618P02300000 GOOG210618P02800000 2021-02-08 11:27AM EST 2021-02-05 12:29PM EST 2021-02-03 10:15AM EST 2021-02-08 10:32AM EST 2021-02-08 10:52AM EST 2021-02-08 12:11PM EST 2021-02-08 11:57AM EST 2021-02-08 12:00PM EST 2021-02-08 10:28AM EST 2021-02-08 3:45PM EST 2021-02-08 1:24PM EST 2021-02-08 10:19AM EST 2021-02-05 10:12AM EST 2021-02-05 3:25PM EST 2021-02-01 9:35AM EST 80.9 87.4 1940 89.2 84 3 6 1960 93.9 0.7 1 49 90.4 96.1 94.7 102.5 1980 1 2 102.8 110 153.25 105.8 1.1 2000 2100 51 0.75% 0.98% 1.01% -1.64% -11.60% 110.1 156.4 28 45 23 151.9 -2.55 7 2200 200 208.1 -26.25 1 4 213.9 281.8 2300 274.8 4 9 280.8 935 0 0 2800 712.2 722 1 1

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The table below shows the prices of call and puts at different strike prices of options on Alphabet Inc. (GOOG) on 12th February, 2021. The

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