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You believe that oil prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use
You believe that oil prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot of petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer domand will fall as oil prices rise You locate an exchange traded fund QLT that represents a basket of industrial companies. You don't want to short the ETF because you don't have enough margin in your account QLT is currently trading at 532 84 You decide to buy a put option (for 100 shares) with a strike price of 533 50 priced at $221 What is your profit into a spreadsheet) you are wrong and the price of XLB increases to $34 50 on the expiration date? (Click on the icon here in order to copy the contents of the data table below QLT: Materials-532.84 Calls Puts Strike Expiration Price Strike Expiration Price $31.00 November $1.22 53100 November 52 63 $33.50 November $1.22 $33 50 November $221 If you are wrong and the price of XLB increases to 534 50 on the expiration date the profits (Round to the nearest dollar Enter a negative number for a loss)
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