Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $80.
Calls Puts Option and NY Close
Expiration Strike Price Vol. Last Vol. Last RWJ Mar 72 250 5.20 180 5.30 Apr 72 190 11.05 147 10.05 Jul 72 159 11.90 63 13.85 Oct 72 80 12.80 31 12.45
a-1. Are the call options in or out of the money? In Out
a-2. What is the intrinsic value of an RWJ Corp. call option? (Do not round intermediate calculations.)
Intrinsic value $
b-1. Are the put options in or out of the money? In Out
b-2. What is the intrinsic value of an RWJ Corp. put option? (Do not round intermediate calculations.)
Intrinsic value $
| Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $80. |
| Calls | Puts | ||||||||||||||||
| Option and | |||||||||||||||||
| NY Close | Expiration | Strike Price | Vol. | Last | Vol. | Last | |||||||||||
| RWJ | |||||||||||||||||
| Mar | 72 | 250 | 5.20 | 180 | 5.30 | ||||||||||||
| Apr | 72 | 190 | 11.05 | 147 | 10.05 | ||||||||||||
| Jul | 72 | 159 | 11.90 | 63 | 13.85 | ||||||||||||
| Oct | 72 | 80 | 12.80 | 31 | 12.45 | ||||||||||||
| a-1. | Are the call options in or out of the money? | ||||
|
| a-2. | What is the intrinsic value of an RWJ Corp. call option? (Do not round intermediate calculations.) |
| Intrinsic value | $ |
| b-1. | Are the put options in or out of the money? | ||||
|
| b-2. | What is the intrinsic value of an RWJ Corp. put option? (Do not round intermediate calculations.) |
| Intrinsic value | $ |
Related questions
| Calls | Puts | ||||||||||
| Strike | |||||||||||
| Close | Price | Expiration | Vol. | Last | Vol. | Last | |||||
| Hendreeks | |||||||||||
| 103 | 100 | Feb | 72 | 5.20 | 50 | 2.40 | |||||
| 103 | 100 | Mar | 41 | 8.40 | 29 | 4.90 | |||||
| 103 | 100 | Apr | 16 | 10.68 | 10 | 6.60 | |||||
| 103 | 100 | Jul | 8 | 14.30 | 2 | 10.10 | |||||
| Suppose you buy 40 February 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $87.15 per share. How much is your options investment worth? What is your net gain? (Do not round intermediate calculations. Omit the "$" sign in your response.) |
| Maximum gain | $ |
| Terminal value | $ |
| Net gain | $ |
Recently, Alibaba stock (symbol BABA) closed at $115.10 a share, up $.26 on the day. Consider the following chart giving the premium as of close of trading on that day on various options on Alibaba shares:
| Calls | Last Sale | Net | Bid | Ask | Vol | Open Int | Puts | Last Sale | Net | Bid | Ask | Vol | Open Int | |
| BABA1405L110-E | 7.03 | -0.52 | 6.70 | 7.30 | 26 | 909 | 14 Dec 110.00 | BABA1405X110-E | 2.12 | +0.26 | 1.95 | 2.20 | 5 | 295 |
| BABA1405L111-E | 6.40 | -0.25 | 6.10 | 6.70 | 36 | 42 | 14 Dec 111.00 | BABA1405X111-E | 2.64 | 0.0 | 2.30 | 2.60 | 0 | 54 |
| BABA1405L112-E | 5.86 | -0.19 | 5.50 | 6.10 | 14 | 298 | 14 Dec 112.00 | BABA1405X112-E | 2.78 | 0.0 | 2.70 | 3.00 | 0 | 122 |
| BABA1405L113-E | 5.19 | -0.45 | 4.90 | 5.40 | 35 | 63 | 15 Dec 113.00 | BABA1405X113-E | 3.83 | +0.33 | 3.10 | 3.70 | 1 | 39 |
| BABA1405L114-E | 4.75 | -0.25 | 4.50 | 5.00 | 27 | 256 | 15 Dec 114.00 | BABA1405X114-E | 3.88 | +0.07 | 3.60 | 4.10 | 20 | 169 |
| BABA1405L115-E | 4.22 | -0.48 | 4.10 | 4.40 | 20 | 1869 | 15 Dec 115.00 | BABA1405X115-E | 4.46 | +0.16 | 4.10 | 4.70 | 53 | 352 |
| BABA1405L116-E | 3.82 | -0.91 | 3.70 | 4.00 | 11 | 326 | 16 Dec 116.00 | BABA1405X116-E | 5.24 | +0.79 | 4.60 | 5.40 | 10 | 27 |
| BABA1405L117-E | 3.49 | -0.74 | 3.30 | 3.60 | 13 | 228 | 16 Dec 117.00 | BABA1405X117-E | 5.76 | +1.26 | 5.20 | 6.00 | 11 | 95 |
| BABA1405L118-E | 3.05 | -1.53 | 2.95 | 3.20 | 1 | 196 | 16 Dec 118.00 | BABA1405X118-E | 5.20 | 0.0 | 5.90 | 6.70 | 0 | 54 |
| BABA1405L119-E | 3.20 | 0.0 | 2.45 | 2.90 | 0 | 361 | 17 Dec 119.00 | BABA1405X119-E | 5.12 | 0.0 | 6.50 | 7.40 | 0 | 160 |
| BABA1405L120-E | 2.42 | -0.32 | 2.30 | 2.60 | 776 | 2543 | 17 Dec 120.00 | BABA1405X120-E | 5.80 | 0.0 | 7.20 | 8.00 | 0 | 106 |
a. What is the premium on the December, 115 call, i.e. the call option which expires on the third Friday of December, and has a strike price of $115?
b. How much would an investor who wanted to buy 1 contract of this option have had to spend (before considering any commission or fees)?
c. What is the formula for the intrinsic value of a call? What was the intrinsic value of the Dec. 118 call? Was this option âin the moneyâ or âout of the moneyâ? What was the time value of this option?
d. Was the Dec. 114 call in or out of the money? What was the intrinsic value of this option? What was the time value of this option?
e. What was the premium on the Dec. BABA 118 put? Was this option in or out of the money? What was the intrinsic value of this put? What is the time value?
f. What was the intrinsic value of the Dec. BABA 112 put? Was this option in or out of the money? What was the optionâs time value?
g. Based on the $115.10 price of Alibabaâs shares, what is the leverage on the Dec. 119 call? Round your answer to two decimal places.
h. Draw a hockey stick diagram for a short position in the BABA Dec. 119 call.
I. Draw a hockey stick diagram for a long position in the BABA Dec. 118 put.
