Suppose that you are writing 5 call contracts on TGT with a strike price of $157.50. The premium is $2.50 per share. Answer the following: (1) Will this option be exercised if the stock price at expiration is $159.25? And more importantly, why (or WHY NOT?) Note: in practicing written communication, your brief answer should be in complete sentences in plain English such that an “average Joe” can follow your line of thought. (2) Calculate your TOTAL profit (loss) if TGT stock price at expiration is $159.25 per share.
Suppose that you are writing 5 call contracts on TGT with a strike price of $157.50. The premium is $2.50 per share. Answer the following: (1) Will this option be exercised if the stock price at expiration is $159.25? And more importantly, why (or WHY NOT?) Note: in practicing written communication, your brief answer should be in complete sentences in plain English such that an “average Joe” can follow your line of thought. (2) Calculate your TOTAL profit (loss) if TGT stock price at expiration is $159.25 per share.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Finance
Suppose that you are writing 5 call contracts on TGT with a strike price of $157.50. The premium is $2.50 per share. Answer the following:
(1) Will this option be exercised if the stock price at expiration is $159.25? And more importantly, why (or WHY NOT?) Note: in practicing written communication, your brief answer should be in complete sentences in plain English such that an “average Joe” can follow your line of thought.
(2) Calculate your TOTAL
Transcribed Image Text:TGT
Go 155.36 A
Extended Hours: 155.13-0.230
Bid: 155.13
Open: 153.62
High: 155.80
Expiration
Strike
05/27/2022 157.50
Action
Buy to Open
Buy
to Close
Sall to Open
Sell to Close
Quantity
1
Save For Later
Regional Quotes
Calls and Puts
Ask:
155.38
Prev Close: 153.43
Low!
150.89
Type
Call
Order Type
Limit
+1.93
(1.26%)
(0.15%)
Option Chains
Nearest 30 days
Strikes
Symbol
Calls May 27, 2022 (Fri: 08 days, Wkly)
150.00
TGT 05/27/2022 150.00 C
152.50
155.00
157.50
160.00
162.50
165.00
Bid
2.50
Brackets
Max Gain: N/A Break Even: N/A Max Loss: N/A
Estimated Cost:
TGT 05/27/2022 152.50 C
TGT 05/27/2022 155.00 C
Target Corp
TGT 05/27/2022 157.50 C
TGT 05/27/2022 160.00 C
TGT 05/27/2022 162.50 C
TGT 05/27/2022 165.00 C
Mid
2.63
Volume: 12,300,170
Spread: 0.25
Size:
Limit Price Timing
2.75
Trade & Probability Calculator
▾7 Strikes
Last Trade
Add A Leg
Spec. Cond. Review Order Cancel Last
3.75
2.64
1.76
Ask
2.75
1.11
0.74
1100 X 300
7.05 +0.45
+0.45
Change
Top Movers
Around the Money Basic View
Bid Midpoint
+0.04
-0.19
-0.21
-0.37
Volume
1,363
6.85
5.10
3.70
2.50
1.75
1.11
0.73
Q.L
222
Delta Theta
0.4157 -0.216
Calls Put
Ask Volume Open Int
7.08 7.30
777
5.33
5.55
913
3.83 3.95 2,100
2.63
2.75
1,363
1.80
1.84 2,055
1.18
1.24
0.79
0.85
322
1,339
341
134
1,177
222
1,500
170
2,065
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