Reference no: EM13831607

Activity: Calculation of the Outcomes of the Calls and Puts Held Long and Short Bob needs your opinion. You receive a voice mail. Voicemail from Bob: “I need to decide the best course of action for the use of the stock option contracts such as long calls and long puts. The stock is currently trading at $37.” In order to make the decision on the best course of action, two tables of calculations are needed: 1. One table for calculations on: a. The possible outcomes of buying a call option for $2.10, exercise price $37.50 b. Possible price ranges for the underlying stock: 25 30 35 40 45 50 55 60 2. A second table for calculations on: a. The possible outcomes of buying a put option for $1.65, exercise price $37.50 b. Possible price ranges for the underlying stock: 25 30 35 40 45 50 55 60 Deliverables 1. A worksheet showing your calculations of the outcomes for the suggested stock price ranges for the call option buying strategy; 2. A worksheet showing your calculations of the outcomes for the suggested stock price ranges for the put option buying strategy.

Activity: Calculation of the Outcomes of the Calls and Puts Held Long and Short

Bob needs your opinion. You receive a voice mail. 

Voicemail from Bob:

“I need to decide the best course of action for the use of the stock option contracts such as long calls and long puts. The stock is currently trading at $37.”

In order to make the decision on the best course of action, two tables of calculations are needed:

1. One table for calculations on:
   1. The possible outcomes of buying a call option for $2.10, exercise price $37.50
   2. Possible price ranges for the underlying stock: 25 30 35 40 45 50 55 60
2. A second table for calculations on:
   1. The possible outcomes of buying a put option for $1.65, exercise price $37.50
   2. Possible price ranges for the underlying stock: 25 30 35 40 45 50 55 60

Deliverables

1. A worksheet showing your calculations of the outcomes for the suggested stock price ranges for the call option buying strategy;
2. A worksheet showing your calculations of the outcomes for the suggested stock price ranges for the put option buying strategy.