1 answer

Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price...

Question:

Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price W3250 V385 V105 V3000 Q16. An in
Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price W3250 V385 V105 V3000 Q16. An investor undertakes a covered call strategy, executing both the 6 points stock and three month options trades at current market prices shown in the table above. The investor plans on selling the stock when the option expires in three months time. Calculate the total profit and loss from these trades if the stock price in three months time is ¥2400, 42700, ¥3000, ¥3300 and ¥3600. Your answer

Answers

The Total profit in all these stock prices can be calculated as below:

Stock Sell Prices ( S) Stock Buy price (P) Short call @ 3000 strike price (L) Short call premium received (C) Gain/(loss) from stock (G) =S-P Total Profit = L+C+G
2400 3250 0 385 -850 -465
2700 3250 0 385 -550 -165
3000 3250 0 385 -250 135
3300 3250 -300 385 50 135
3600 3250 -600 385 350 135
.

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