Refer to Figure 24.11 in the text to answer this question. Suppose you purchase an August 2012 call option on crude oil futures with a strike price of 8500 cents per barrel. How much does your option cost per barrel of oil? What is the total cost? Suppose the price of oil futures is 9000 cents per barrel at expiration of the options contract. What is your net profit or loss from this position? What if oil futures prices are 8000 cents per barrel at expiration?

Figure 24.11

Transcribed Image Text:

FIGURE 24.11 Future Options Prices: Wednesday, June 20, 2012 Oat Options (Expiring July 2012): CALLS PUTS H/ Lo Limit HI / Lo Limit Volume High Prior Strike Prior Settle Change Last High Volume Updated Low Price Last Change Settle Low Updated 9:31:37 AM CT 7:04:16 PM CT 31'4 11'4 315 O'0 2'0 22'0 6/19/2012 No Limit No Limit 6/20/2012 104 274 931:39 AM CT 10-54:38 AM CT 96 a לי22 9'6 a 320 -0'6 3'0 22a 6/20/2012 No Limit No Limit 6/20/2012 11:25:24 AM CT 10-50:47 AM CT 25'4 5'4 +07 6'3 a 325 4'2 a -1'6 6'0 6/20/2012 No Limit No Limit 6/20/2012 10-50:49 AM CT 4'1 b +1'0 330 -3.1 S'O 5'4 283 10:38:40 AM CT 6/20/2012 No Limit No Limit 6/20/2012 10:33:51 AM CT 7:07:07 AM CT 221 40'2 73b 335 12'5 32'5 6/20/2012 No Limit No Limit 6/20/2012 Silver Options (Expiring July 2012): CALLS PUTS H/ Lo HI / Lo Limit Prior Strike Prior Volume High Updated Low Settle Change Last Price Last Change Sottle Low High Volume Limit Updated 9:01:05 AM CT No Limit 0.001 8500 56.632 No Limit 7:06:26 PM CT 6/20/2012 0.001 0.001 6/19/2012 57.632 9:01:05 AM CT No Limit 0.001 8600 No Limit 7:07:00 PM CT 0.001 0.001 6/20/2012 6/19/2012 8700 9:01:05 AM CT No Limit 0.001 58.632 No Limit 7:04:40 PM CT 6/20/2012 0.001 0.001 6/19/2012 9:01:05 AM CT No Limit 0.001 9000 6170a +0.076 61.632 61.787 No Limit 10-27:04 PM CT 6/20/2012 0.001 0.001 6/19/2012 9:01:05 AM CT No Limit 0.001 10000 71.632 No Limit 7-05:47 PM CT 6/20/2012 0.001 0.001 6/19/2012 Light Sweet Crude Oil Options-1,000 U.S. barrels, cents per barrel (Expiring August 2012): CALLS PUTS Prior Settle Change Last Prior HI / Lo Limit H/ Lo Strike Volume High Price Updated Low Last Change Sottle Low High Volume Limit Updated 11:40:22 AM CT 6/20/2012 No Limit 68 3.65 b 2.09 a 0.001 -1.51 12.09 a 8300 3.58 b +1.33 2.25 2.06 3.58 b 179 No Limit 11:40:25 AM CT 0.01 0.01 6/20/2012 11:40:22 AM CT 3.86 b No Limit 87 3.33 b 1.87 a 0.001 -1.43 1.87 a 8350 3.86 b +1.41 2.45 2.58 45 No Limit 11:40:25 AM CT 6/20/2012 0.01 0.01 6/20/2012 3.03 b 1.6 a No Limit 11:40:25 AM CT 11:40:25 AM CT No Limit 244 0.001 -1.34 1.67 a 8400 4.16 b +1.50 2.66 247 a 4.16 b 53 0.01 6/20/2012 0.01 6/20/2012 כור 283 +1.59 4.47b 11:40:25 AM CT No Limit 1.48 a 0.001 -1.25 1.48 a 8450 4.47 b 2.88 3.18 28 No Limit 11:40:25 AM CT 6/20/2012 0.01 0.01 6/20/2012 11:40:22 AM CT 989 -1.18 4.78b No Limit 2.58 1.31 a 0.001 1.31 a 8500 4.78 b +1.66 3.12 291 a 59 No Limit 11:40:26 AM CT 6/20/2012 0.01 0.01 6/20/2012 CAD/USD Options (Expiring September 2012): CALLS PUTS Prior Strike Prior Updated Updated 11:37:06 AM CT Volume High Low Settle Change Last Price Last Change Settle Low High Volume 0.0222 b 0.0200 a 0.0221 -0.0021 0.0200 a 9700 0.0126 b 40.0010 0.0116 0.0107 0.0126 b 11 11:37:21 AM CT 6/20/2012 6/20/2012 11:37:29 AM CT 11:37:26 AM CT 0.0189 b 0.0168 a 0.0188 -0.0020 0.0168 a 9750 0.0146 b 40.0013 0.0133 0.0130 0.0146 b 10 6/20/2012 6/20/2012 11:41:05 AM CT 11:37:13 AM CT 0.0160 0.0136 a 0.0158 0.0022 0.0136 a 9800 0.0167 b +0.0014 0.0153 0.0150 a 0.0167 b 6/20/2012 6/20/2012 0.0131 b 0.01l1a 0.0131 11:37:12 AM CT 11:38:58 AM CT -0.0020 0.0111 a 9850 0.0192 b +0.0016 0.0176 0.0174 0.0192 b 6/20/2012 6/20/2012 0.0107 b 0.0090 a 0.0107 11:41:05 AM CT -0.0017 0.0090 a 9900 0.0218 b +0.0016 0.0202 0.0195 a 0.0218 b 11:37:06 AM CT 6/20/2012 6/20/2012 Source: cmngroup.com