Stock A is currently trading @ 5500. Dylan is expecting the markets to fall down from...
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Stock A is currently trading @ 5500. Dylan is expecting the markets to fall down from these levels. So buying 50 Put Option of Stock A having Strike 5500 @ premium 50 each will benefit Dylan when Stock A falls below 5550. Dylan's profit can be shown below. 14000 12000 10000 8000 6000 4000 2000 0 -2000 -4000 5200 5300 5400 5500 5600 5700 5800 Q2. Discuss advantages/disadvantages of this strategy. What is the max that Dylan can lose and what is the breakeven stock price? Stock A is currently trading @ 5500. Dylan is expecting the markets to fall down from these levels. So buying 50 Put Option of Stock A having Strike 5500 @ premium 50 each will benefit Dylan when Stock A falls below 5550. Dylan's profit can be shown below. 14000 12000 10000 8000 6000 4000 2000 0 -2000 -4000 5200 5300 5400 5500 5600 5700 5800 Q2. Discuss advantages/disadvantages of this strategy. What is the max that Dylan can lose and what is the breakeven stock price?
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Related Book For
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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