Would anyone be able to explain how to solve for each thing and what I would nee
ID: 2751341 • Letter: W
Question
Would anyone be able to explain how to solve for each thing and what I would need to solve for them? I have the information for the stocks but I can't fit it here. Any information about equations or how I can solve for these would be SOOOO appreciated. I am so lost.
Table 2. Covered Equity Call/Put Writing with individual stock options Income Write 2 AA APR- 12 Calls at 4.10 _____ Write 1 AAPL APR- 330 Call at 8.8 _____ Write 3 BP APR- 48 Puts at 2.98 _____ Write 2 PFE APR -19 Call at 1.24 _____ Write 3 WMT APR- 52.5 Calls at 1.33 _____ Total _____ Market UP 3% Stock Theoretical Price Stock Gain Option Income Total Alcoa Inc (AA) _____ _____ _____ _____ Apple Inc (AAPL) _____ _____ _____ _____ BP PLC (BP) _____ _____ _____ _____ Pfizer Inc (PFE) _____ _____ _____ _____ Wal-Mart Stores Inc (WMT) _____ _____ _____ _____ Total _____ _____ _____ _____Explanation / Answer
For the stocks whose calls have to be written, the following equation shall follow to calculate the Stock gain:
Stock Gain = Strike Price - Exercise Price
For the stocks whose puts have to be written, the following equation shall follow to calculate the Stock gain:
Stock Gain = Exercise Price - Strike Price
Thus, for all the above list of shares, these values shall be needed to calculate stock gain.
The option for writing call and put is the option income calculated as under:
Name of Stock No. of Calls/ Puts Written Option Price Option Income AA 12 4.10 49.2 AAPL 330 8.8 2904 BP 48 2.98 143.04 PFE 19 1.24 23.56 WMT 52.5 1.33 69.825 Total 3189.625Related Questions
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