Question

What is your maximum profit if you short one MBI March 120 put option for a...

What is your maximum profit if you short one MBI March 120 put option for a premium of $10? _________. Multiple Choice

$11,000

$12,000

$120

$1,000

0 0
Add a comment Improve this question Transcribed image text
Answer #1

In case of shorting an option, the maximum profit that the option writer earns is the premium of the option itself. If 1 put

Add a comment
Know the answer?
Add Answer to:
What is your maximum profit if you short one MBI March 120 put option for a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5....

    You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice $300 loss $300 profit $500 profit $800 profit

  • You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5....

    You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice A) $500 profit B) $300 profit C) $800 profit D) $300 loss

  • 12. (2 points) A call option on Brocklehurst Corp. has an exercise price of $30. The...

    12. (2 points) A call option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The call option is a. at the money b. in the money c. out of the money d. knocked in 13. (3 points) You purchase one MBI March 120 put contract (equaling 100 shares) for a put premium of 510. The maximum profit that you could gain from this strategy is 2. S120 b. $1,000 c....

  • You write one Chih, Inc. April 120 put contract (equaling 100 shares) for a premium of...

    You write one Chih, Inc. April 120 put contract (equaling 100 shares) for a premium of $4. You hold the option until the expiration date, when Chih stock sells for $118 per share. You will realize a ______ on the investment. Multiple Choice $600 loss Incorrect $200 profit $200 loss $300 profit

  • What is your maximum possible profit if you long one Apple, Inc. July 74 put contract...

    What is your maximum possible profit if you long one Apple, Inc. July 74 put contract with a premium of $2.59?

  • You purchase a put option on a stock. The profit at maturity of the option is...

    You purchase a put option on a stock. The profit at maturity of the option is ___________ where X equals the option's strike price, ST is the stock price at contract expiration and CP0 is the original purchase price of the option.      A) Max(0, ST - X) - CP0      B) Max(0, X - ST ) - CP0      C) Max(0, X - ST - CP0)      D) Max(0, ST - X - CP0) The maximum loss a seller of a stock put...

  • The maximum possible gain of a long position in call option is __________, and the maximum...

    The maximum possible gain of a long position in call option is __________, and the maximum possible gain of a short position in put option is __________. Multiple Choice exercise price - stock price, premium stock price - exercise price, unlimited unlimited, exercise price - stock price unlimited, premium

  • 1.You write a short put option giving the purchaser the right to sell 100 shares of...

    1.You write a short put option giving the purchaser the right to sell 100 shares of Rothbard Corporation for a premium of $1,300. The strike price of the option is $20 and the final stock price is $85. What is your profit or loss? 2.You write a short call option giving the purchaser the right to buy 100 shares of Garrett Corporation for a premium of $1,600. The strike price of the option is $35 and the final stock price...

  • Draw a diagram showing the profit and loss of a natural gas put option (for March...

    Draw a diagram showing the profit and loss of a natural gas put option (for March 2018) with a strike price of $3.10/MMBtu and the premium of $0.2. Make sure to show how the profit/loss situation depends on the gas price at the time of the option maturity. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised?

  • The maximum possible gain of a long position in call option is __________, and the maximum...

    The maximum possible gain of a long position in call option is __________, and the maximum possible gain of a short position in put option is __________. Multiple Choice A) stock price - exercise price, unlimited B) exercise price - stock price, premium C) unlimited, exercise price - stock price D) unlimited, premium

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT