QUESTION 4You want to sell four call option contracts on AA Industries ntock at a strike price of $32.50 a share. How muchwill you receive in option premiums if you place this order today?Use these option quotes to answer this question:ZZ Industries: Price 34.36Calla:StrikeSymbolLastChgBidAskVolОрen Int30.00 ZZBF4.3010.074.304.40623,42932.50 ZZBZ1.8710.071.821.872368,16835.00 ZZBG0.0110.050.000.01311938,017Puts:StrikeSymbolZZNFChgOpen Int7,258LastBidAskVol30.000.010.000,000.0132.50 ZZNZ0.0110.020.000.0156234,97235.00ZZNG0.6010.140.630.68263719,68601.51.0202 5702O3. 5827O4. 5720

Option premium is the amount that the call option writer gets when he sell the call option.

You want to sell four call option contracts on AA Industries stock at a strike price of $32.50 a share. How much will you receive in option premiums if you place this arder today? Use these option quotes to answer this question: ZZ Industries: Price 34.36 Calls: Symbol Strike Last Chg Bid Ask Vol Open Int 30.00 ZZBF 4.30 10.07 4.30 4.40 62 3,429 32.50 ZZBZ 1.87 10.07 1.82 1.87 236 8,168 35.00 ZZBG 0.01 10.05 0.00 0.01 3119 38,017 Puts: Open Int 7,258 Strike Symbol ZZNF Last Chg Bid Ask Vol 30.00 0.01 0.00 0.00 0.01 32.50 ZZNZ 0.01 10.02 0.00 0.01 562 34,972 35.00 ZZNG 0.60 10.14 0.63 0.68 2637 19,686 01.51.02 O2 5782 O3.5827

You want to sell four call option contracts on AA Industries stock at a strike price of $32.50 a share. How much will you receive in option premiums if you place this arder today? Use these option quotes to answer this question: ZZ Industries: Price 34.36 Calls: Symbol Strike Last Chg Bid Ask Vol Open Int 30.00 ZZBF 4.30 10.07 4.30 4.40 62 3,429 32.50 ZZBZ 1.87 10.07 1.82 1.87 236 8,168 35.00 ZZBG 0.01 10.05 0.00 0.01 3119 38,017 Puts: Open Int 7,258 Strike Symbol ZZNF Last Chg Bid Ask Vol 30.00 0.01 0.00 0.00 0.01 32.50 ZZNZ 0.01 10.02 0.00 0.01 562 34,972 35.00 ZZNG 0.60 10.14 0.63 0.68 2637 19,686 01.51.02 O2 5782 O3.5827

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

See similar textbooks

Similar questions

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 profit (loss) if TGT stock price at expiration is $159.25 per share.
Question 4?
Consider the following Put Option: May 50 trading at $3.15/share May is the expiration 50 is the Strike Price$3.15 is the PremiumIf, at expiration, the stock price is $40, the Buyer (to Open) would have a TOTAL gain or loss of.....(not per share) if a loss use the '-' sign
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
7. Ahmed is strategizing to add option investment for short term on ABC stock that is currently trading at $35, the strike price is $40. With the interest rate of 3 percent and call option price of $2.45, what should be the put option price using put-call parity formula. A) $6.28 B) $2.85 C) unlimited D) $16.45 E) $9.70 my Show Transcribed Text
Basic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 1. Buy one August 170 call contract. Hold it until expiration. lIdentify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? 2. Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185
M2
Solve question b
You have taken a long position (bought) in a call option on Google common stock. The option has an exercise price of $525 and Google's stock is currently trading at $510. The option premium is $20. What is the: Break Even Point:
1.) The option is currently a.) In-the-money b.) At-the-money c.) Out-the-money 2.) In/At/Out- the money by _____ pesos. 3.) What is the Intrinsic Value
PROTECTIVE PUTS Current stock price for Amazon is $810. A put option on Amazon stock with the exercise price of $810 and maturity of 1 month sells at $5 premium. Ignore interests. (1)Plot the payoff against Amazon’s stock price if you buy only Amazon stock What is your max gain? What is your max loss? (2)Plot the payoff against Amazon’s stock price if you buy only put option on Amazon stock What is your max gain? What is your max loss? (3)Plot the payoff against Amazon’s stock price if you buy both Amazon stock and put option on Amazon stock What is your max gain? What is your max loss?
Profit on Option You have purchased a call option contract on Dash common stock. The option has an exercise price of $32.00 and Dash’s stock currently trades at $30.00. The option premium is quoted at $2.20. Calculate your net profit on the option contract if Dash’s stock price rises to $35.00 and you exercise the option. Calculate your net profit on the option contract if Dash’s stock price rises to $33.00 and you exercise the option. c-1. If the stock price is $31.00, what would be the gain or loss if you exercise or not exercise the option. c-2. Based on your answers above would it be more profitable to exercise the option or not exercise the option?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS