The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $97 per share. You have employee stock options to purchase 1,000 TWTR shares for $102 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 87 percent and that the interest rate is 2.6 percent. (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? O Call Put b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options. Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of your TWTR options
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- The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $67 per share. You have employee stock options to purchase 1,000 TWTR shares for $72 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 57 percent and that the interest rate is 2.6 percent. (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? O Call O Put b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options. Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of your TWTR options c. What is the estimated value of the options if their maturity is six months instead of three years? Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of the options d. What is the estimated value of the options if their…The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $97 per share. You have employee stock options to purchase 1,000 TWTR shares for $102 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 87 percent and that the interest rate is 2.6 percent. (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? O Call Put b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options. Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. X Answer is complete but not entirely correct. Value of your TWTR options $ c. What is the estimated value of the options if their maturity is six months instead of three years? Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. 11 X Answer is complete but…The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $89 per share. You have employee stock options to purchase 1,000 TWTR shares for $94 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 79 percent and that the interest rate is 2.2 percent. (Assume the options are European options that may only be exercised at the maturity date.) Is this option a call or a put? multiple
- The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $67 per share. You have employee stock options to purchase 1,000 TWTR shares for $72 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 57 percent and that the interest rate is 26 percent. (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? Call✔ O Put b. Using an option pricing calculator such as the one atlerieri.com/blackscholes, estimate the value of your TWTR options. Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of your TWTR options c. What is the estimated value of the options if their maturity is six months instead of three years? Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of the optionsThe common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $75 per share. You have employee stock options to purchase 1,000 TWTR shares for $80 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 65 percent and that the Interest rate is 3 percent (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? O Call O Put b. Using an option pricing calculator such as the one at erleri.com/blackscholes, estimate the value of your TWTR options. Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of your TWTR options c. What is the estimated value of the options if their maturity is six months Instead of three years? Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of the options d. What is the estimated value of the options if their…Today on August 18 Tesla Inc. stock (TSLA) trades at a spot price of $220 per share. A trader decides to buy a European call option contract (= 100 call options) on the stock with a strike price of $220 and maturity September 15 (i.e., in one month). The price of the European call option contract is $12 per option. (i) Under what circumstances does the trader make a gain on September 15? (ii) What is the maximum possible gain for the trader? (iii) What is the maximum possible loss for the trader? Provide short answers for (i). (ii), (iii).
- Consider a stock in two periods (two years). The stock price goes up by 30% or down by 10%in each period. Current stock price is $100. There is a European put option on the stock withexercise price $110 and time to maturity of two years. The interest rate in each period is 6%. Inthe template, Date 0 denotes today, Date 1 denotes the end of year 1 and Date 2 denotes the endof year 2. Use the two-period binomial tree model and discrete discounting to find the put optionprice on Date 0.k nces The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $83 per share. You have employee stock options to purchase 1,000 TWTR shares for $88 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 73 percent and that the interest rate is 3.4 percent. (Assume the options are European options that may only be exercised at the maturity date.) a. Is this option a call or a put? Call O Put b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options. Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of your TWTR options $ 83,000 c. What is the estimated value of the options if their maturity is six months instead of three years? Note: Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar. Value of the options d. What is the estimated value of the…DD Center Strike 12) Calls/Puts 80 Calls Ticker Bid 21-Jan-22 (0d); CSize 100; R.26; IFwd 216.06 5.80 1 TGT 1/21/22 C210 2) TGT 1/21/22 C212.5 3) TGT 1/21/22 (215 4 TGT 1/21/22 C217.5 5) TGT 1/21/22 C220 3.65 1.77 56 15 10 Puts Calls 10.00 4.60 1.76 .62 Ask 7.40 6.10 2.28 .89 .26 19 Term Structure 1) Moneyness 21.60 13.80 8.65 5.15 2.95 Last 18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32 TGT 2/18/22 C200 7) TGT 2/18/22 C210 17.55 20.00 10.25 4.90 TGT 2/18/22 C220 TGT 2/18/22 C230 100 TGT 2/18/22 C240 1.96 .73 18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36 11) TGT 3/18/22 C200 20.15 12) TGT 3/18/22 C210 13.45 130 TGT 3/18/22 C220 8.35 14 TGT 3/18/22 C230 4.85 15) TGT 3/18/22 C240 2.70 7.35 6.65y 2.10 .80 21 28.50y 10.80 5.15 1.98 .72 29.00y 14.25 9.65 5.10 2.85 IVM 118.18 130.35 66.42 64.54 60.19 37.18 29.19 27.75 27.49 28.22 35.07 32.58 31.34 31.07 31.08 Volm Strike Puts Ticker Bid 21-Jan-22 (0d); CSize 100; R 26; IFwd 216.06 .18 44 89 1.96 3.90 Ask .31 .59 5…
- A company's stock currently sells for $131.55. A one-year European put option on that stock with strike price of $140 sells for $22.1, and the risk free interest rate is 1.07%. The market expects the company to pay dividends during that period, and the market consensus is that present value of those dividends is $3.52. The price of a one-year European call option on that stock with strike price of $140 is $ (Note i: answer must be accurate to the nearest cent). (Note ii. Use annual compounding NOT exponential compounding for the purpose of this question).Consider a U.S. exchange-traded call option contract to buy 100 shares with a strike price of $37 and maturity in six months. Explain how the terms of the option contract would be revised if the specified change involving the underlying stock were to occur. What would be the revised strike price contract if there were a 5-for 1 stock split? Report your answer rounded to dollars and cents. Answer:Assume you purchased the right to sell 2,000 shares of Target stock in February 2022 at a strike price of $240 per share. Suppose Target stock sells for $212 per share immediately before your options’ expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $268 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as a percent rounded to 2 decimal places.