In Example 3.4, you bought two Nike 140 put contracts for $562. Suppose that the expiration date arrives and Nike is selling for $130 per share. How did you do? What’s the break-even stock price, that is, the stock price at which you just make enough to cover your $562 cost?

Example 3.4

Suppose you want the right to sell 200 shares of Nike sometime before February 18, 2022, at a price of $140. In light of the information in Figure 3.5, what contract should you buy? How much will it cost you?

Figure 3.5

Transcribed Image Text:

FIGURE 3.5 NKE US Equity 5 Actions 90 Export. 97 Settings. NIKE INC-CL B 1144.75 2.02 142.73 Strikes Exp 21-Jan-22- Center Calc Mode 10 Center Strike Calls/Puts Calls 1) NKE 1/21/22 C141 2NKE 1/21/22 C142 3NKE 1/21/22 C143 4 NKE 1/21/22 C144 SNKE 1/21/22 C145 Ticker Bid 21-Jan-22 (08); CSize 100; R.26; IFwd 143.60 3.45 2.38 1.38 1.06 55 Options Trading 10.90 7.05 4.10 2.08 .90 10 Futs Calls 11.65 8.55 5.75 3.75 2.09 Ask 18-Feb-22 (28d); CSize 100; R 26; IFwd 143.63 NKE 2/18/22 C135 7) NKE 2/18/22 C140 0 NIKE 2/18/22 C145 9NKE 2/18/22 C150 10 NIKE 2/18/22 C155 4.10 3.20 2.34 1.56 85 1.4153 Exch US Composite As of 21-Jan-2022 19 Term Structure Last 3.19 1.30y 1.00 .65 12.00 7.60 4.50 2.31 1.10 13.55 18-Mar-22 (560); CSize 100; IDiv.14 USD; R 26; IFwd 143.52 LDNKE 3/18/22 C135 12) NKE 3/18/22 C140 IRINKE 3/18/22 C145 14 NKE 3/18/22 C150 9.90 6.60 4.30 15) NKE 3/18/22 C155 2.72 11.00 6.30y 4.05 2.49 1.08 144.67/144.82 13.56y 8.84y 6.45 4.11 2.80 Honeynese IVM 83.10 79.87 40.64 54.77 56.28 35.55 29.39 27.82 26.59 26.14 30.72 28.11 29.10 27.55 27.53 Hi 145.32 92) 03/18/22 E | ERN >> Volm Strike Lo 143.82 Ticker Bid 11 19 21-Jan-22 (08); CSize 100; R.26; Ifwd 143.60 141.00 SD NKE 1/21/22 P141 3142.00 520) NKE 1/21/22 P142 143.00 530 NKE 1/21/22 P143 4144.00 50 NKE 1/21/22 P144 59 145.00 55) NKE 1/21/22 P145 27 55 90 18-Feb-22 (28d); CSize 100; R.26; IFwd 143.63 68135.00 50NKE 2/18/22 P135 140.0057) NKE 2/18/22 P140 2145.00 SD NKE 2/18/22 P145 7150.00 39) NKE 2/18/22 P150 7155.00 600 NIKE 2/18/22 P155 135.00 D NKE 3/18/22 P135 140.00 620 NKE 3/18/22 P140 5145.00 630NKE 3/18/22 P145 13 150.000 NKE 3/18/22 P150 5155.00 (5) NKE 3/18/22 P155 1.54 2.62 4.50 7.35 11.00 Puts 3.05 4.65 6.60 9.15 12.35 Volm 887068 Ask 23 35 .63 88 1.46 1.70 2.81 4.70 7.65 Last .10 39 .65 72 1.20 11.45 18-Mar-22 (56d); CSize 100; IDiv.14 USD; R .26; IFwd 143.52 3.95 5.05 7.55 10.45 14.00 1.67 2.59 4.80 8.81y 12.90 3.47 4.92 7.35 10.84y 11.53y Option Monitor HV 28.69 IVM 78.15 71.75 67.22 63.81 65.66 32.55 29.86 28.01 26.54 25.02 33.08 30.73 29.25 28.16 27.92 Volm BANN ANG 29 27 19 23 42 2475