Hi, Can you please show the working out in simple terms, I would really like to understand how this works. Thanks

Dale bought 5 put option contracts for NAB shares, with a strike price of $8.76. At the expiry date the market price, or spot price, is $6.30. Each contract consists of 100 shares.

What would Dale's profit be if he exercised his options?

Dale paid a premium of $0.40 per share.

Answer;

Mandy bought 9 call option contracts for NAB shares, with a strike price of $10.02. At the expiry date the market price, or spot price, is $15.97. Each contract contains 100 shares.

What would Mandy's profit be if she exercised her option?

Mandy paid a premium of $0.50 per share.

Answer;

Jay sold 8 put option contracts for NAB shares, with a strike price of $8.07. At the expiry date the market price, or spot price, is $6.72. Each contract contains 100 shares.

What would Jay's loss be if the buyer of the option exercised this option?

Note: Do not input a -ve sign in your response, just enter the numerical value

Jay received a premium of $0.30 per share.

Answer