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    Keller Payoff H.W1 - Prajwal Kumar

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    Prajwal Kumar
    This document contains two payoff matrices that show the profit and loss outcomes for buying and selling call and put options on LOTS stock with a strike price of $55 expiring in February 1994. The first matrix shows the premium cost, gross payoff, and net payoff for different stock prices. The second matrix expands on this by separating the stock gain/loss and option payoff to determine the total gain or loss.

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    Keller Payoff H.W1 - Prajwal Kumar

    Uploaded by

    Prajwal Kumar
    12 views2 pages
    This document contains two payoff matrices that show the profit and loss outcomes for buying and selling call and put options on LOTS stock with a strike price of $55 expiring in February 1994. The first matrix shows the premium cost, gross payoff, and net payoff for different stock prices. The second matrix expands on this by separating the stock gain/loss and option payoff to determine the total gain or loss.

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    IB Payoffs

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    This document contains two payoff matrices that show the profit and loss outcomes for buying and selling call and put options on LOTS stock with a strike price of $55 expiring in February 1994. The first matrix shows the premium cost, gross payoff, and net payoff for different stock prices. The second matrix expands on this by separating the stock gain/loss and option payoff to determine the total gain or loss.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    12 views2 pages

    Keller Payoff H.W1 - Prajwal Kumar

    Uploaded by

    Prajwal Kumar
    This document contains two payoff matrices that show the profit and loss outcomes for buying and selling call and put options on LOTS stock with a strike price of $55 expiring in February 1994. The first matrix shows the premium cost, gross payoff, and net payoff for different stock prices. The second matrix expands on this by separating the stock gain/loss and option payoff to determine the total gain or loss.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 2

    Payoff Matrix for LOTS (55) February Call/Put Positions

    Problem 1

    Buy LOTS (55) Call Sell LOTS (55) Call Buy LOTS (55) Put
    LOTS Price Premium Gross Net Premium Gross Net Premium Gross
    (Feb 1994) Cost Payoff Payoff Income Payoff Payoff Cost Payoff
    65 2.875 10 7.125 2.875 -10 -7.125 2.625 0
    60 2.875 5 2.125 2.875 -5 -2.125 2.625 0
    55 2.875 0 -2.875 2.875 0 2.875 2.625 0
    50 2.875 0 -2.875 2.875 0 2.875 2.625 5
    45 2.875 0 -2.875 2.875 0 2.875 2.625 10

    Problem 2

    Buy LOTS (55) Call Sell LOTS (55) Call Buy LOTS (55) Put
    LOTS Price Stock Option Total Stock Option Total Stock Option
    (Feb 1994)Gain/Loss Payoff Gain/Loss Gain/Loss Payoff Gain/Loss Gain/Loss Payoff
    65 10 7.125 17.125 10 -7.125 2.875 10 -2.625
    60 5 2.125 7.125 5 -2.125 2.875 5 -2.625
    55 0 -2.875 -2.875 0 2.875 2.875 0 -2.625
    50 -5 -2.875 -7.875 -5 2.875 -2.125 -5 2.375
    45 -10 -2.875 -12.875 -10 2.875 -7.125 -10 7.375
    ll/Put Positions

    y LOTS (55) Put Sell LOTS (55) Put


    Net Premium Gross Net
    Payoff Income Payoff Payoff
    -2.625 2.625 0 2.625
    -2.625 2.625 0 2.625
    -2.625 2.625 0 2.625
    2.375 2.625 -5 -2.375
    7.375 2.625 -10 -7.375

    y LOTS (55) Put Sell LOTS (55) Put


    Total Stock Option Total
    Gain/Loss Gain/Loss Payoff Gain/Loss
    7.375 10 2.625 12.625
    2.375 5 2.625 7.625
    -2.625 0 2.625 2.625
    -2.625 -5 -2.375 -7.375
    -2.625 -10 -7.375 -17.375

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