Protective put strategy

User Generated

qfunu911

Business Finance

Sdsu

Description

You have purchased 100 shares of Apple Inc. stock and plan to hold them until June 2020. You set up a bottom line in the investment: you don’t want to lose more than $20 per share and you decide to use options to realize the goal.

  • On Nov 22, 2019, you go to Nasdaq (www.nasdaq.com) to look for the options that mature in June 2020. The information is in the excel file attached.
  • What is the current stock price of Apple Inc. on Nov 22, 2019? (1 point)
  • You decide to use the protective put strategy to achieve your goal. Briefly describe what’s protective put strategy? (1 point)
  • Create an excel table in the format given to you to calculate the profits of protective put using each of the option available (use the last price as the price of the option). (5 points)
  • How will you construct your portfolio? Which option will you choose and why? (1 points)
  • Draw the graph of the profit of your portfolio with options you selected. (2 points)

Due by Dec 3, 2019, noon

Unformatted Attachment Preview

Company Apple Inc. Symbol AAPL Option Chain for Apple Inc. (AAPL) Calls 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 Last 34.01 29.97 27 21.44 16.6 12.3 Chg -0.23 -0.73 -0.24 -0.47 -0.15 -0.25 Last Sale $261.87 Change Net / % 0.03% 0.09 Bid 33 29.2 24.85 21 16.1 12.1 Ask 35.2 31.7 28.55 22.4 16.95 12.65 Vol 150 10 181 87 116 401 Open Int 3864 3282 8941 4714 5588 5730 Root AAPL AAPL AAPL AAPL AAPL AAPL Strike 240 245 250 260 270 280 Puts 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 19-Jun-20 Last 10.65 12 14.5 18.49 23.55 28.34 Chg -0.15 -0.45 0.25 0.14 0 0 Bid 10.65 10.65 13.25 18 22.95 28.45 Ask 11 13 15.85 18.65 24.25 30.75 Vol 156 66 74 131 7 0 Open Int 2233 1159 1818 1270 737 191 Protective put Stock Prices Beginning Market Price Ending Market Price (input) (input) Options Options Strike Price Profit (input) (input) (input) (input) (input) (input) (input) (formula) (formula) (formula) (formula) (formula) (formula) (input) (input) (input) (input) (input) End market price Protective put 1 Protective put 2 240 250 260 270 280 290 300 20.00 15.00 10.00 5.00 0.00 240 -5.00 -10.00 -15.00 -20.00 250 260 270 280 290 300 FIN 327 Fall 2019 Assignment 4: Protective put strategy Due by Dec 3, 2019, noon You have purchased 100 shares of Apple Inc. stock and plan to hold them until June 2020. You set up a bottom line in the investment: you don’t want to lose more than $20 per share and you decide to use options to realize the goal. 1. On Nov 22, 2019, you go to Nasdaq (www.nasdaq.com) to look for the options that mature in June 2020. The information is in the excel file attached. 2. What is the current stock price of Apple Inc. on Nov 22, 2019? (1 point) 3. You decide to use the protective put strategy to achieve your goal. Briefly describe what’s protective put strategy? (1 point) 4. Create an excel table in the format given to you to calculate the profits of protective put using each of the option available (use the last price as the price of the option). (5 points) 5. How will you construct your portfolio? Which option will you choose and why? (1 points) 6. Draw the graph of the profit of your portfolio with options you selected. (2 points) Please send your work in excel to ntang@sdsu.edu. Each student needs to fill in the following form to evaluate other teammates’ contributions to the team work. If you don’t submit the form, a default point “1 point” will be given to your teammates. You can submit the form separately from the team work submission so that others won’t see your evaluation. Student name: . Evaluation of teammates’ contributions: Teammates’ names 1. 2. 3. 4. 5. Your evaluation of teammates’ work (out of 1)
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Explanation & Answer

Hi there, kindly go through the attached document and let me know if you've got any queriess

Company
Apple Inc.

Symbol
AAPL

Option Chain for Apple Inc. (AAPL)
Calls
19-Jun-20
19-Jun-20
19-Jun-20
19-Jun-20
19-Jun-20
19-Jun-20

Last
34.01
29.97
27
21.44
16.6
12.3

Chg
-0.23
-0.73
-0.24
-0.47
-0.15
-0.25

Last Sale
$261.87

Change Net / %
0.03%
0....


Anonymous
I was struggling with this subject, and this helped me a ton!

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