Set up the following trades using data from Yahoo Finance. CHOOSE A DIFFERENT STOCK FOR EACH POSITION.
a) call
b) put
c) stock + covered call
d) stock + floor
e) bull spread
f) straddle
All options have to be purchased between February 1-8, 2012
• Record closing prices of the underlying stocks at expiration. You need to look-up the stock prices between the close on the expiration Friday and the open on Monday. Or, you will need to figure out how to get a past quote on a stock.
Do NOT purchase penny options
Purchase one contract for each option position (representing 100 shares)
For the two positions needing a stock as well, purchase 100 shares of stock, too.
Write one paragraph (three or four quick sentences) explaining: Price of underlying stock; option purchased or written to get the position (as well as premiums); How much was paid or received from premiums and how much was paid for the stock (and NET amount, too); What must happen to the price of the stock for the position to be profitable?
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