You have $5,000 in a 50% margin account. You have been following a stock that you think you want to buy. The stock is priced at $52.47. You decide that if the stock falls to $49.75, you would like to buy it. You place a limit order to buy 300 shares at $49.75. The stock falls to $49.75. What happens?
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#59
You have
in a
margin account. You have been following a stock that you think you want to buy. The stock is priced at
You decide that if the stock falls to
you would like to buy it. You place a limit order to buy
shares at
The stock falls to
What happens?
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- You want to purchase Stock A currently trading at $50 per share. You have $10,000 of your own to invest. You borrow an additional $10,000 from your broker and invest $20,000 in the stock. How far does the price of Stock A have to fall for you to get a margin call if the maintenance margin is 35%? Round your answer to two decimal places and enter the number without the dollar sign2. Suppose you buy shares of a stock worth OMR20000 and the initial margin is 50% and the maintenance margin is 30%. A. How much money must you pay the broker for the shares? How much have you borrowed from the broker? B. Suppose the price of the stock falls so that the shares are only worth OMR10000. What would be your nev account equity? C. How much money you need to give the broker to meet the maintenance margin?6. Assume you own Apple stock. The current price is $100. Assume a strike of $110 and expiration of 3 months. The premium is $4 for a call. Assume you use a covered call. What is the maximum profit you can make? Now assume you use a protective put with a premium of $6 and strike of $108 and the price falls to $90. What is the profit/loss?
- What about for these? (b) Suppose you have purchased some GameStop shares on margin at $5per share. You ask your broker to put in a limit sell order at $7, anda stop loss order at $4.50.i. What will happen if the stock price falls to $4.50?ii. What will happen if the stock price rises to $7?iii. Now suppose you had instead short-sold your GameStop shares(as in the first part of the question). What instructions mightyou give to your broker to minimise your losses and lock in yourgains?An investor opens a margin account with an initial deposit of $5500. He then purchases 870 shares of a stock at $44. His margin account has a maintenance margin requirement of 30%. Ignoring commissions and interest, IF the price changed to 27 WHAT IS YOUR NEW EQUITY The correct answer is AT WHAT PRICE YOU WILL GET A MARGIN CALL PRICE?Suppose you own a put option on Apple stock with a strike price of $150. Suppose it is the expiration date of the option and the current stock price of Apple is $75. What payoff will you receive from making an optimal exercise decision on your option? 1. -$75 2. $0 3. $75
- suppose that you have a call option that is at 1.30. it has a Delta of .35 a Gamma of .06 a Theta of .02 assume Vega is constant. today the stock moves from $45 to $46. the next day (day 2) the stock moves another dollar to $47. What is the value of your call option at the end of day two A. $2.02 B. $1.69 C. $1.73 D. $1.98Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 100 shares with the excise price of $140. Required: a-1. If the stock price at option expiration is $144, will you exercise your call?a-2. What is the net profit/loss on your position? (Input the amount as a positive value.)a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) b-1. Would you exercise the call if you had bought the November call with the exercise price $135?b-2. What is the net profit/loss on your position? (Input the amount as a positive value.)b-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)c-1. What if you had bought the November put with exercise price $140 instead? Would you exercise the put at a stock price of $140?c-2. What is the rate of return on your position? (Negative…An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor sells a call for $.50 with a strike price of $40. What is the maximum profit and loss for this position? (Loss amount should be indicated by a minus sign.) Maximum profit Maximum loss $ GAGA
- The price of a stock is $35. A put option to sell that stock at $36 is currently selling for $3. You buy the stock and the put. Complete the following table and answer the questions. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any. If the answer is zero, enter "0". Price of the stock Profit on stock Profit on put Net profit $22 $ $ $ 29 $ $ $ 36 $ $ $ 43 $ $ $ 50 $ $ $ 64 $ $ $ What is the maximum possible profit on the position? The maximum possible profit is . What is the maximum possible loss on the position? Enter your answer as a positive value. $ What is the range of stock prices that generates a profit? The position generates a profit as long as the price of the stock exceeds $ . What advantage does this position offer? Enter your answer as a positive value. Round your answer to the nearest dollar. The investor limits the to $ .c. You purchased 100 shares of common stock on margin at $55 per share. Assume that the initial margin is 60%, with the maintenance margin of 35%. If the price moves to $40 per share, what would be the remaining equity margin in your account? Calculate the price at which there will be a margin call?You’ve borrowed $22,000 on margin to buy shares in Ixnay, which is now selling at $32 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $22 per share. a. Will you receive a margin call? multiple choice No Yes b. How low can the price of Ixnay shares fall before you receive a margin call? (Round your answer to 2 decimal places.) Margin call will be made as price _______ or lower.