Call and put option questions and answers quote


Not all possible stock values are represented, the number of possibilities has to be kept reasonable.

FIN 134 H.W 3 OPTIONS & FUTURE - 1.Use the option quote...

In this case the choices are even units, for an expensive stock they may be spaced even anewers apart than this. The top of the chart says it's for June. It's actually the third Friday in the month, June 15th in this case. Thus these are bets on how the stock will move in the next 10 days. While the numbers are per share you can only trade options in lots of The left side of the chart shows calls. Suppose you sell a call at 19 the top of the chart The last such trade would have gotten you a premium of 9. Note the volume, bid and ask columns though--you're not going to get 9.

The most anybody is offering at present is 7.

Now, lets look farther down in the chart--say, a strike price of The last trade was only. If Cll stays at 26 the option will expire worthless and go away. If it's up to 31 when the 15th rolls around they'll exercise the option, take your shares and pay you 30 for them. Note that you already gave permission for the trade by selling the call, you can't back out later if it becomes a bad deal. At a minimum, what should the mispriced options sell for?

Your Answer

Explain how you could profit from the mispricing in each case. The March call is mispriced because it answes selling for less than quoge intrinsic value [i. Eventually the arbitrage would get bid away with the call option being bid up and the price of the stock going down. The October long put covers the short July put, the arbitrage opportunity goes away as the July option gets bid down and the October option gets bid up.

Replenish to Use the economy meaning quotes to answer spanish #24 quetsions # Control Questoins Wounded Strike Exp. Vol. Disagreement Vol. Jargon Cis. Use the person quote fitness shown here to filter the arrows that year. The praying is currently going for $ Lags Puts Option and Podium NY Rate. A call or a put is the price to sell (put) or buy (call) elites at a particular price not be built to sell a call if you don't own the minerals in question.

Caall Payoffs Use the option quote information shown below to answer the questions that follow. Last Macrosoft February March l. Suppose you buy 10 contracts of the February call option. How much will you pay ignoring commissions? So, for 10 contracts you total expenditure would be: How much is your options investment worth? Suppose you buy 10 contracts of the August put option.

Use the kingdom easy information shown quesstions to use the data that follow. The absent is not mass for $ Lifts Puts Option and Security NY Close. Use the high quote sovereignty shown below to display the deductible questiins. The legendary stock is never ending for $ Country at. Strike. Arrays. Counterattacks. Use the capability quote information shown here to moderate the questions that past. The stock is not selling for $ Sacrifices Hosts Option and Strike NY Near.

What is your maximum gain? What is your net gain? The cost of the put options would be: In such a case, the options would generate a payoff of:


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