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Calculating option payoffs

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Reference no: EM133060059

Use the following options quotations to answer Problems 1 though 3:

 

Calls

Puts

Close

Strike Price

Expiration

Vol.

Last

Vol.

Last

Hendreeks

 

 

 

 

 

 

103

100

Feb

72

5.20

50

2.40

103

100

Mar

41

8.40

29

4.90

103

100

Apr

16

10.68

10

6.60

103

100

Jul

8

14.30

2

10.10
  1. Option Quotes (LO1). Suppose you buy 50 April 100 call option contracts. How much will you pay, ignoring commissions?
  2. Calculating Option Payoffs (LO2, CFA2). In problem 1, suppose that Hendreeks stock is selling for $105.70 per share on the expiration date. How much is your options investment worth? What if the stock price is $101.60 on the expiration date?
  3. Calculating option Payoffs (LO2, CFA2). Suppose you buy 30 March 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $84.60 per share. How much is your options investment worth? What is your net gain?

Reference no: EM133060059

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