Create a call option payoff diagram in the “Question 1” tab for a case of buying 10 call options....

Question

Create a call option payoff diagram in the “Question 1” tab for a case of buying 10 call options. The
strike price is $60, and the option premium is $3.50 for each option.
First, you’ll need to fill in the “profit” column for 10 options, and then create a line chart showing the
profit diagram.
Question 2
You are analyzing a potential put option trade on Hedwig Corp. Let’s say your research has led you to
believe that the stock will be worth $25 per share in two months (it’s currently $50). You have $9,000 to
trade on your research, and the put options you are considering are shown below:
Strike Price Bid Price Ask Price
$45.00 $8.67 $8.91
$30.00 $0.12 $0.15
How much money will you have if you buy the $45 strike price put option? What about put options with
a $30 strike price?

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Prince · Accepted Answer

Question 1
		Strike Price (K)
		Option Premium per option
		Ending Stock Price	Profit
		$0.00	($3.50)
		$5.00	($3.50)
		$10.00	($3.50)
		$15.00	($3.50)
		$20.00	($3.50)
		$25.00	($3.50)
		$30.00	($3.50)
		$35.00	($3.50)
		$40.00	($3.50)
		$45.00	($3.50)
		$50.00	($3.50)
		$55.00	($3.50)
		$60.00	($3.50)
		$65.00	$1.50
		$70.00	$6.50
		$75.00	$11.50
		$80.00	$16.50
		$85.

Create a call option payoff diagram in the “Question 1” tab for a case of buying 10 call options. The strike price is $60, and the option premium is $3.50 for each option. First, you’ll need to fill...

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