Calculate the option profit to the trader

Assignment Help Finance Basics
Reference no: EM13273543

It is April and a trader buys 100 September put options with a strike price of $21. The stock price is $17.63 and the option price is $4.74. At the expiration, the stock price becomes $18.01. Calculate the option profit to the trader.

Reference no: EM13273543

Questions Cloud

What is the interest rate that the investor locked in : On January 8, 2016, a bank wants to lock in the 3-month interest rate starting on June 20, 2017. The investor buys June2017 Eurodollar futures contracts at 96.53. What is the interest rate that the investor locked in?
What is the forward price : An investor has just taken a long position in a 5-month forward contract on the stock. What is the forward price?
Where on the x-axis is the electric field zero : Teo point charges are on the x-axis. The first is located at -4 meters and has a charge of -6 coulombs. Where on the x-axis is the electric field zero
Which is an effective way to achieve such goal : Currently, the beta of a stock fund is 1.2. Suppose the fund manager wants to reduce the beta of this portfolio. Which is an effective way to achieve such goal?
Calculate the option profit to the trader : It is April and a trader buys 100 September put options with a strike price of $21. The stock price is $17.63 and the option price is $4.74. At the expiration, the stock price becomes $18.01. Calculate the option profit to the trader.
Influence of darwin on literature : Influence of Darwin on Literature," critic William Irvine describes the effect that Charles Darwin's evolutionary theory cast upon the age: "it undermined the argument for benevolent design in nature, explaining evolution according to principles w..
What is the net force on the charge at the origin : Three point charges are on the x-axis. The first is located at -4 meters asn has a charge of -6 coulombs. What is the net force on the charge at the origin
What price should be charged in orger to maximize profits : If fixed costs are 100,000 and the following chart represents the demand at various prices, what price should be charged in orger to maximize profits?
What price should the company charge : If demand falls to 73,700 units and the company wants to continue to earn a 0.31 return, what price should the company charge.

Reviews

Write a Review

Finance Basics Questions & Answers

  Yield the highest roi

Determine which of these scenarios would be the best choice for a company looking to increase capacity and will yield the highest ROI in their first year of production?

  Long term planning for making and financing investments

Long-term considering for making and financing investments that affect financial results for more than the current year is called, If the appropriate tax rate is 30 percent, the after-tax effect of an $100,000 savings in labor expense is:

  Building financial models

The given tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets

  What is value of the bonds

Suco co needs $800,000 to develop a plant. It issues a $1,000 par value bond with a coupon rate of 12 percent and 15 years maturity. The investors rate of return of 12 percent.

  What would be the monthly payments on the new loan

What would be the monthly payments on the new loan? d. Should you refinance today, if the new loan is expected to be outstanding for 5 years?

  Stock investing risk-required rate of return-interest rates

Explain why a foreign investment project might have a lower required return than an otherwise-identical domestic project. What is the relationship between interest rates and bond prices?

  What is the current share price

If the required return is 11 percent and the company just paid a dividend of $1.45, what is the current share price?

  Estimate the current value of a share

The Seneca Maintanance Corporation currently pays a common stock dividend of $1.50 per share. Dividends are expected to grow at a rate of 11 percent per year for the next four years and then to continue growing thereafter at a rate of 5 percent per y..

  Determine the selling price of bonds

A Company has an issue of $1000 par value bonds with a 12% stated interest rate outstanding. The issue pays interest yearly and has ten years remaining to its maturity date.

  What will be the approximate expected cash flow

What will be the approximate expected cash flow in year 5, if the project has an Internal Rate of Return of 6%?

  Calculate the standard deviation of the return

How is an investor's choice of which security to purchase related to his degree of risk aversion and calculate the standard deviation of the return on the security.

  What is the profit or loss for deere and bros

The legal fees were $152,000, printing costs were $56,000, and all the other expenses were $71,000. What is the profit or loss for Deere and Bros.?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd