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I have a question about Stocks and Bonds.?

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  • I have a question about Stocks and Bonds.?


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Answer #1 | 20/12 2013 05:06
A. 1400 Purchase 100 shares at 50 will cost you $5000 Purchase 1 call contract will cost you $400 then the exercise of the call at 60 will cost you $6000 (total cost of $6400) Therefore the option strategy will cost you $ 1400 more.
Positive: 56 %
Answer #2 | 20/12 2013 13:04
Well considering the fact that when you exercise, it is the premium that is forfeited, so that is the $400 dollars. By exercising he would have made $1300- $400 premium= $900 profit Buying the stock at $60 per share he would have made 100shares x 13 = $1300 dollars So id say a $400 difference? <<<<< $1300.00 - $900.00 = yea unless He bought at $50 per share, so $73- $50 = 23 and 23 x 100 = $2300 $2300 - $900 = $1400.00 <<<< And you question was not very clear but I believe it was my last answer.
Positive: 50 %
Answer #3 | 21/12 2013 04:49
He paid $60 per share instead of $50 per share, a $10 difference * 100 shares = $1,000 AND he paid $400 for the call. Total money he could have saved by buying the stock three months earlier vs. buying the call and then buying the stock at $60 = $1400 To put it another way... buy 100 shares at $50 = $5,000 VS. buy call for $400 + buy 100 shares at $60 = $6400 difference: $1400
Positive: 30 %

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