Assume you decided to purchase the June 1890 through 1905 put options quoted in Table 21.2 on
Question:
Assume you decided to purchase the June 1890 through 1905 put options quoted in Table 21.2 on May 16, 2019, and you financed each position by borrowing at 3% for 37 days. Plot the profit of each position as a function of the stock price on expiration.
Table 21.2:
Transcribed Image Text:
The description of each traded option can be read as: year and month of expiration, followed by the strike price. For example, the first call listed expires in June 2019 and has an exercise (strike) price of 1880.00. AMZN (AMAZON.COM INC) May 16 2019 @ 15:27 ET Calls Last Sale Net Bid Ask Vol 19 Jun 1880.00 69.7 15.40 68.65 69.20 19 Jun 1885.00. 65.4 13.73 65.65 66.15 19 Jun 1890.00 64.53 15.41 62.70 63.20 19 Jun 1895.00 19 Jun 1900.00 19 Jun 1905.00 19 Jun 1910.00 19 Jun 1915.00 19 Jun 1920,00 Open Int Puts Last Sale 94 19 Jun 1880.00 40.3 19 Jun 1885.00 41.29 98 71 19 Jun 1890.00 43.5 985 398 229 60 13.28 59.80 60.30 71 122 56.9 12.55 56.85 57.45 1631 2402 54.35 12.28 54.05 54.75 100 275 51.70 11.80 51.40 52.05 190 346 51.5 13.76 49.00 49.45 158 259 19 Jun 1915.00 46.4 10.73 46.5 46.95 204 826 19 Jun 1920.00 19 Jun 1895.00 19 Jun 1900.00 19 Jun 1905.00 19 Jun 1910.00 1,903.73 32.58 Net Bid Ask Vol Open Int 16.00 40.10 40.50 62 457 -17.435 42.05 42.45 76 245 -17.7 44.10 44.50 60 521 46 -17.775 46.15 46.65 118 148 48.5 -17.93 48.35 48.85 1254 2111 49.7 -19.45 50.60 51.10 47 90 50.5 -21.58 52.95 53.45 69 291 56.2 -18.65 55.40 55.85 77 215 57.0 -20.83 57.80 58.35 53 420
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Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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