What are mary maximum profit and maximum loss

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Reference no: EM131997979

For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the question is asking from the seller of the put option’s point of view.

The market price for Alibaba Group Holding Limited. (Ticker: BABA) was $198.74 when Mary sold a put option today. The put premium is $9 and the exercise price is $190. The option will be expired on June 15, 2018.

a) Draw the contingency graph for Mary. Label each point/interaction on the graph.

b) What is the break-even point for Mary?

c) What are Mary’s maximum profit and maximum loss?

d) Show the profit/loss for Mary if, at the expiration date, the BABA price is (1) $175, (2) $181, and (3) $250.

Reference no: EM131997979

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