| Call Premiums | Put Premiums |
Strike | Jan. | Feb. | Jan. | Feb. |
105 | 7.50 | 7.75 | .50 | .60 |
110 | 6.25 | 6.50 | .65 | .75 |
115 | 1.15 | 1.20 | 3.25 | 3.62 |
120 | .75 | .95 | 8.10 | 8.85 |
Suppose that you decided to set up a short strip position usingthe Jan. 105 options. Find your profit/loss if the stock trades for$110 when the options expire. Round intermediate steps to fourdecimals and your final answer to two decimals. Do not use thedollar sign when entering your answer.
Suppose that you decided to set up a long strap position usingthe Feb. 110 options. Find your profit/loss if the stock trades for$127 when the options expire. Round intermediate steps to fourdecimals and your final answer to two decimals. Do not use thedollar sign when entering your answer.
A hedge fund manager believed that DEF stock would be relativelystable over her investment horizon and decided to use the Feb 120options to create a straddle position based on her belief. If thestock trades for $127 when the options expire, what is herprofit/loss?
- -90
- 90
- 280
- -280
- None of the above
Suppose that you decided to create a long strangle positionusing the 115 Feb call and the 110 Feb put when the stock pricetraded at $112. Find your profit/loss if the stock trades at $118when the options expire.
- 105
- -105
- 605
- -605
- None of the above
