Suppose that a March call option on a stock with a

Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised?

The primary theme of the paper is Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised? in which you are required to emphasize its aspects in detail. The cost of the paper starts from $139 and it has been purchased and rated 4.9 points on the scale of 5 points by the students. To gain deeper insights into the paper and achieve fresh information, kindly contact our support.

Question 1

A trader enters into a one-year “short” forward contract to sell an asset for $60   when the spot price is $58. The spot price in one year proves to be $63. What is the trader’s gain or loss?  

Question 2

A trader buys one (1) European call option contract (one contract consists of 100 shares). The strike price is $20 and the time to maturity is one year. The premium is $2 per share. The price of the underlying asset proves to be $25 in one year. What is the trader’s gain or loss? 

Question 3

A trader sells one (1) European put option contract (one contract consists of 100 shares). The strike price is $50 and the time to maturity is six months. The premium received for each share is $4. The price of the underlying asset is $41 in six months. What is the trader’s gain or loss? 

Question 4

Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised?