### Construct a long straddle using the october 165 options

Assignment Help Finance Basics
##### Reference no: EM131291076

Repeat problem 11, but close the positions on September 20. Use the spreadsheet to find the profits for the possible stock prices on September 20. Generate a graph and use it to identify the approximate breakeven stock prices

problem 11

Construct a long straddle using the October 165 options. Hold until the options expire. Determine the profits and graph the results. Identify the breakeven stock prices at expiration and the minimum profit.

#### Identify the breakeven stock prices at expiration

Determine the profits and graph the results. Identify the breakeven stock prices at expiration and the minimum profit? Analyze the August 160/170 box spread. Determine wheth

#### Identify the approximate breakeven stock price

Then close the position on September 20. Use the spreadsheet to find the profits for the possible stock prices on September 20. Generate a graph and use it to identify the a

#### Identify the two breakeven stock prices

Construct an appropriate butterfly spread using the October 160, 165, and 170 calls. Hold the position until expiration. Determine the profits and graph the results. Identif

#### Estimate the maximum and minimum profits

Close the position on August 1. Use the spreadsheet to find the profits for the possible stock prices on August 1. Generate a graph and use it to estimate the maximum and mi

#### Derive the profit equations for a put bull spread

Derive the profit equations for a put bull spread. Determine the maximum and minimum profits and the breakeven stock price at expiration ? Explain why a straddle is not nece

#### How it changes the payoff and up-front cost

Explain how a short call added to a protective put forms a collar and how it changes the payoff and up-front cost? Explain the process by which the profit of a short straddl

#### Evaluating option strategies is effect of transaction costs

(Concept Problem) Another consideration in evaluating option strategies is the effect of transaction costs. Suppose that purchases and sales of an option incur a brokerage c

#### Determine the profit from the transaction

Determine the profit from the transaction if the options are held to expiration. Make sure that the profit properly accounts for the interest that accrues over the holding p