Practice Problems on Option Strategies Use the following data for all problems. Price 226.14 Expiration 1f15f2021 Call Premium Put Premium Strike Bid Ask Bid Ask 265 29.60 30.15 18.10 18.50 220 26.90 22.35 20.35 20.80 225 24.30 24.25 22.80 23.20 280 22.00 22.30 25.35 25.80 285 19.65 20.10 28.05 28.55 290 12.55 12.90 30.95 3145 Note: If you are buying an option you pay the Ask price {higher price]. If you sell an option you receive the Bid price {lower price]. For each strategy find the 3. Initial investment b. Breakeyen Price(s) c. % Move to Breakeven from today's price d. Max loss {in S and % terms] e. Max loss Price f. % move to max loss price from todaifs price 3. Max gain {in S and % terms} h. Max gain price i. % moye to max gain price from today's price j. Gain loss from strategy {in $ and % terms) for a 30%, 20%, 10%, 0%, +10%, +20%, +30% move in priCe from today's price 7. Covered call with a strike of 270. This strategy means buying a stock today and selling a call with a strike of 270. Covered Call Buy Stock 276.14 Sell Call 26.9 Strike 270 Initial Investment 249.24 Breakeven Price 249.24 % move to BE -9.74% Downside Protection Max loss 249.24 % max loss 100% Max loss price 0 % move to max loss 100% Max gain 20.76 %max gain 8.33% Max gain price 270 % move to max gain -2.22% Senitivity Analysis on Price Movement from today price -30% -20% -10% -5% 0% 5% 10% 20% 30% Price at Expiration 193.30 220.91 248.53 262.33 276.14 289.95 303.75 331.37 358.98 Gain/loss from Stock -82.84 -55.23 -27.61 -13.81 0.00 13.81 27.61 55.23 82.84 Gain/loss from Option (call) 26.9 26.9 26.9 26.9 20.76 6.95 -6.85 -34.47 -62.08 Net -55.94 -28.33 -0.71 13.09 20.76 20.76 20.76 20.76 20.76 % return -22.44% -11.37% -0.28% 5.25% 8.33% 8.33% 8.33% 8.33% 8.33%