What is your net profit on position

Assignment Help Financial Management

Reference no: EM131332767

You expect that the stock of GoPro, currently trading at $71 per share, will be volatile in the next three months, and the price will change significantly. However, you do not know the direction of the change. Thus, you decide to enter into a long straddle position using 3 month options, buying both a put and a call contract struck at $71. The premium on both options is $2.8 per share. If at maturity, GoPro is trading at $84 per share, what is your net profit on this position? Remember that each option contract is for 100 shares.

Reference no: EM131332767

Questions Cloud

Paper about depression : Depression: Introduction to depression and Physiological factors of depression. Physiologic symptoms of depression (central, endocrine & peripheral symptoms). Physiologic mechanisms (The Monoamine Hypothesis and Monoamine Receptor changes)

Commuting time of its employees : A large corporation is interested in determining whether an association exists between the commuting time of its employees and the level of stress-related problems observed on the job. A study of 116 assembly-line workers reveals the following:

Futures contract on copper traded : A futures contract on copper traded at the Chicago Mercantile Exchange has a denomination of 25,000 pounds. Today you enter into a long futures position of 10 contracts on copper at $3.43 per pound, maturing in 6 months. If copper is trading at $3.75..

What are some of the major issues in homeland security : What are some of the major issues in homeland security? If you were to rank these issues in order , what would that look like? Explain. Fully explain intelligence-led policing and total criminal intelligence.

What is your net profit on position : You expect that the stock of GoPro, currently trading at $71 per share, will be volatile in the next three months, and the price will change significantly. However, you do not know the direction of the change. Thus, you decide to enter into a long st..

Discuss the rise of the persian empire : Discuss the rise of the Persian Empire. How was it different from pervious major empires in the Middle East? How did it gain so much power? What problems did it face

Prove that the beliefs of the manufacturers are inconsistent : Describe this situation as a game with incomplete information.- Prove that the beliefs of the manufacturers are inconsistent.

Find out expected observations and deviation : The observed frequencies are 891 Insured and Surgical, 316 Uninsured and surgical, 290 Insured and medical, 119 uninsured and medical. Find out expected observations and deviation.

How much did the yen strengthen relative to euro : Suppose that inflation in Japan was 2% and in Germany it was 5%. Assume Relative PPP holds. How much did the yen strengthen relative to euro? If the euro weakened relative to the yen by 10%, what was the magnitude of the real depreciation of the euro..

User Account

All Pages