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suppose that you are expecting the stock price to move substantially over the next three months you are considering a
using the black-scholes-merton model compute and graph the time value decay of the october 165 call on the following
construct a calendar spread using the august and october 170 calls that will profit from high volatility close the
derive the profit equations for a put bull spread determine the maximum and minimum profits and the breakeven stock
explain how a short call added to a protective put forms a collar and how it changes the payoff and up-front cost
concept problem another consideration in evaluating option strategies is the effect of transaction costs suppose that
concept problem in each case examined in this chapter and in the preceding problems we did not account for the interest
suppose the call price is 1420 and the put price is 930 for stock options where the exercise price is 100 the risk-free
using bsmbin8exls compute the call and put prices for a stock option where the current stock price is 100 the exercise
explain conceptually the choice of strike prices when it comes to designing a call-based bull spread specifically
explain conceptually the choice of strike prices when it comes to designing a zero-cost collar specifically address the
concept problem another variation of the straddle is called a strangle a strangle is the purchase of a call with a
concept problem many option traders use a combination of a money spread and a calendar spread called a diagonal spread
explain the difference between a forward contract and an option what factors distinguish a forward contract from a
how do options on futures differ from options on the asset underlying the futures the open interest in a futures
list and briefly explain the important contributions provided by futures exchanges how do locals differ from
what factors would determine whether a particular strategy is a hedge or a speculative strategy how are spread and
what are the various ways in which an individual may obtain the right to go on to the floor of an exchange and trade
explain the differences among the three means of terminating a futures contract an offsetting trade cash settlement and
suppose that you buy a stock index futures contract at the opening price of 45225 on july 1 the multiplier on the
the crude oil futures contract on the new york mercantile exchange covers 1000 barrels of crude oil the contract is
what is the objective of an industry self-regulatory organization compare and contrast three types of futures trading
why is the value of a futures or forward contract at the time it is purchased equal to zero contrast this with the
if futures prices are less than spot prices the explanation usually given is the convenience yield explain what the
on july 10 a farmer observes that the spot price of corn is 2735 per bushel and the september futures price is 276 the