trader creates a long butterfy spread from options with strike prices $60, $65,and $70 by trading a total of 400 options, The options are worth $11,$14,and $18, What is the maximum net loss (after the cost of the options is taken into account? 0 $300 O $400 O $100 O $200
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Atrader creates a long butterfy spread from options with strike prices $60, $65,and $70 by trading a total of 400 options, The options are worth $11,$14,and $18, What is the maximum net loss (after the
cost of the options is taken into account?
0 $300
O $400
O $100
O $200
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- A trader creates a long butterfly spread from call options with strike prices $60, $65, and $70 by trading a total of 400 options. The call options are worth $11, $14, and $18. What is the maximum net loss (after the cost of the options is taken into account)? Select one alternative: O $300 O $100 O $400 O $200A trader creates a long butterfly spread from call options with strike prices $60, $82, and $92 by trading a total of 400 options. The options are worth $8, $14, and $23 respectively. What is the maximum net gain (after the cost of the options is taken into account)?Label the following for this diagram: a. Name of options payoff b. Identify whether positive or negative premium c. Identify breakeven point d. What is the profit or loss when stock price is S60 at maturity e. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity? Option Payoffs and Profits Long put $40 $20 $0 Option Payoff Option Profit Exerche Price $20 S40 $20 $40 S60 $80. Stock Price At Maturity Payoff and Profit
- Based on the put - call parity, please briefly explain how to replicate a call option of a stock with a strike price of $100. Assume that the risk-free rate is 5%.You are pricing options with the following characteristics: •Current stock price (St): $35.60 •Exercise price (X): $50 •Time to expiration (T-t): 9 months •Risk-free rate (rf): 3.25% •Volatility (0): 45% (a): What is the Black-Scholes value of call option? In your hand-written solution, provide the calculations of d1,d2, and the final call price. Use Excel or another spreadsheet program to compute the values of N(d1) and N(d2). See the notes for details. (b): Using put-call parity, what is the value of a put option? For this case, assume continuous compounding, which implies that PVt(X)=e-r(T-t).X.1. Strike = $60 Put = $8 / option Call = $10 / option Probable market values at maturity: 30, 40, 50, 60, 70, 80, 90. Size of contract: one share Required: a) Supposing that the market is on the rise and you are an options buyer, show the net results for each market value and graph them. b) Supposing that the market is on the rise and you are an options seller, show the net results for each market value and graph them. c) Supposing that the market is on the fall and you are an options buyer, show the net results for each market value and graph them. d) Supposing that the market is on the fall and you are an options seller, show the net results for each market value and graph them.
- A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on the sto of $30 costs $4. Suppose that a trader buys two call options and one put option. The breakeven sto the trader makes a profit is A) $28 B $20 C) $26 D $25Suppose that call options on a stock with strike prices $100 and $106 cost $8 and $5, respectively. How can the options be (the profits from option positions and the total profit).Assume a stock is selling for GH¢48.50 with options available at 40, 50, and 60 strike prices.The 50 call option price is at 2.75.a. What is the intrinsic value of the 50 call?b. Is the 50 call in the money?c. Are the 40 and 60 call options in the money?
- Calculate the elasticity of a call option with a premium of $5.00 and a strike price of $69. The call has a hedge ratio of 0.7, and the underlying stock's price is currently $35. (Round your answer to 2 decimal places.) Elasticity of the call %A. An option is trading at $5.03. If it has a delta of -.56, what would the price of the option be if the underlying increases by $.75? What would the price of the option be if the underlying decreases by $.55? B. What type of option is this and how? C. With a delta of -.56, is this option ITM, ATM or OTM and how?A put option with an exercise price of P90 was priced at P4. At expiration, the underlying stock is selling for P95.50. If you wrote this put for P4, your profit or loss at expiration would be at what amount? please need it asap uhu