You think the price of AMZN stock, which is currently $900 is likely to change significantly over the next three months, you are just not sure which direction. So you buy a long straddle position, with a call and put option, worth $8 and $9 per share, respectively, three months to expiration, and a strike price of $900.f at expiration AMZN is trading at $896, what is your net profit per share on this position?

You think the price of AMZN stock, which is currently $900 is likely to change significantly over the next three months, you are just not sure which direction. So you buy a long straddle position, with a call and put option, worth $2 and $6 per share, respectively, three months to expiration, and a strike price of $900.What is the lower breakeven stock price?  (There are two breakeven stock prices in this problem, answer the lower one)

Three month European put options with strike prices of $35 and $40 cost $4 and $6, respectively.  You bought a bear spread using those two put options. a. What is the maximum gain per share from the bear spread? 

You think the price of AMZN stock, which is currently $900 is likely to change significantly over the next three months, you are just not sure which direction. So you buy a long strangle position, with a call and put option, worth $15 and $2 per share, respectively, three months to expiration, and strike prices of 910 (call) and 890 (put). If at expiration AMZN is trading at $866, what is your net profit per share on this position? 

1. Three call options on a stock have the same expiration date and strike prices of 55,60,65. The market prices are $8, $5, and $3, respectively. 
   1. a. Explain how a butterfly spread can be created. 
   2. b. Construct a table showing the profit per share from the strategy for the following stock prices. 

 

Stock Price on Maturity	Profit
50
57
60
64
70

c. For what range of stock prices would the butterfly spread lead to a profit?

d. Graph the profit diagram to this strategy. Please label the three strike prices on the horizontal axis; label max gain and max loss on the vertical axis.

 

Three month European put options with strike prices of $35 and $40 cost $4 and $6, respectively.  You bought a bear spread using those two put options.  

 What is the maximum loss per share from the bear spread? (Answer it as a positive number, e.g. if max loss = 6, just answer it as 6 rather than -

Three month European put options with strike prices of $35 and $40 cost $4 and $6, respectively. 

 You bought a bear spread using those two put options?

What is the breakeven stock price from the bear spread?