Prices of stock options on Microsoft, January 2, 2019 Expiration Strike Call Put 18 Jan 2019 95 7 65 0 98 18 Jan 2019 100 3 81 2 20 18 Jan 2019 105 1 45 4 79 8 Feb 2019 95 9 50 2 86 8 Feb 2019 100 5 60 3 92 8 Feb 2019 105 3 08 6 35 Look at the Microsoft options Suppose you buy a January expiration ...

a If the stock price in January is 103 and you have a call option with an exercise price of 100 you ...

Prices of stock options on Microsoft, January 2, 2019 Expiration Strike Call Put 18-Jan-2019 95 7.65 0.98

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Prices of stock options on Microsoft, January 2, 2019

Expiration	Strike	Call	Put
18-Jan-2019	95	7.65	0.98
18-Jan-2019	100	3.81	2.20
18-Jan-2019	105	1.45	4.79
8-Feb-2019	95	9.50	2.86
8-Feb-2019	100	5.60	3.92
8-Feb-2019	105	3.08	6.35

Look at the Microsoft options. Suppose you buy a January expiration call option with an exercise price of $100.

a. Suppose the stock price in January is $103. Will you exercise your call? What is the profit on your position?

b. What if you had bought the January call with an exercise price of $95?

c. What if you had bought a January put with an exercise price of $105?

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Prices of stock options on Microsoft, January 2, 2019 Expiration Strike Call Put 18-Jan-2019 95 7.65 0.98

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