Maximum possible gain and loss, Finance Basics

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Maximum possible gain and loss

Suppose that you initiated a short position in stock X, selling when the market price was $75 per share. The stock price has fallen to $69 per share.

a. Calculate your current profit, and your maximum possible gain and loss

b. Now assume that you buy a put option to protect your position. Your put has a strike price of $69 per share, maturity of 6 months, and the per share premium is $2.95. What is your maximum possible gain and loss with the protective put?

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Finance Basics: Maximum possible gain and loss

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Recent Questions Asked Finance Basics

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Ask an Expert for Answer!!

Finance Basics: Maximum possible gain and loss

Reference No:- TGS044653

Recent Questions Asked Finance Basics

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