I really like this educator's videos. Is there a playlist of his lectures? Or his course on Analystprep portal??? I enjoy watching him more than the other educators.
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So clear and logical! All info fall into place with this structure! A Really great educator You are! (Other similar videos always left me confused, this one talks in a system!) One Question remains: What about the leverage? Usually an option contract controls 100 shares. Does it make the profitability much closer to the strike price? The break even happens with a 100x multiplier so the premium is absorbed within a few points from the strike price? All these examples are talking about one contract with one share?
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Glad it helped! If you like our video lessons, it would be appreciated if you could take 2 minutes of your time to leave us a review here: trustpilot.com/review/analystprep.com
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An investor is speculating on Company ZZ shares. The shares are currently trading at $140 per share. The investor believes that Company ZZ’s shares will experience a bearish run, and she wants to use call options to take advantage of this. She finds that a call option on Company ZZ’s shares, with an exercise price of $120, is selling at a premium of $400. She decides to buy the call option and simultaneously writes another call option on Company ZZ’s shares, with an exercise price of $105, at a premium of $600. One call option is made up of 100 shares. a) what is the net cost(gain) of the position b) what is the maximum loss c) what is the maximum gain d) what is the break even e) what can the investor do to retain the same profile of the option strategy in the scenario but using put options instead?
Why would the investor want to take advantage of call options if he believes that Company ZZ’s shares will experience a bearish run, why not use put options? Or maybe sell the forward contracts? According to my understanding, if one believes or expects the share price to go down in value (bearish run), then buying put options will be advantageous.
I cannot imagine how you have explained the subject in that amazing way... Thanks a million.
what an easy explanation even a beginner should be able to grasp without confusion !!!
cant thank you enought!!!! you made this topic super easy to understand in a structured way!!!
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Thank you for this clear and concise explanation, it has helped me a lot
Clear explanation ever. Thank you so much
really good explanation, thank you
I really like this educator's videos. Is there a playlist of his lectures? Or his course on Analystprep portal??? I enjoy watching him more than the other educators.
Thank you so much, you have cleared my confusions so well !!
Glad it was helpful! If you like our video lessons, it would be appreciated if you could take 2 minutes of your time to leave us a Google review using this link: g.page/r/CQIlM78xSg01EB0/review
So clear and logical! All info fall into place with this structure! A Really great educator You are! (Other similar videos always left me confused, this one talks in a system!) One Question remains: What about the leverage? Usually an option contract controls 100 shares. Does it make the profitability much closer to the strike price? The break even happens with a 100x multiplier so the premium is absorbed within a few points from the strike price? All these examples are talking about one contract with one share?
thank you so much it is so helpful for exams
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Perfect video, thanks a lot.
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Clear and bright explanation
you are the best!
Love him❤❤
Thank you
Perfect thanks
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amazing
Excellent
Thank you sooooooo much
EXCELLENT
Perfect
Thank you!
Somebody please help me with this activity below;
An investor is speculating on Company ZZ shares. The shares are currently trading at $140 per share. The investor believes that Company ZZ’s shares will experience a bearish run, and she wants to use call options to take advantage of this. She finds that a call option on Company ZZ’s shares, with an exercise price of $120, is selling at a premium of $400. She decides to buy the call option and simultaneously writes another call option on Company ZZ’s shares, with an exercise price of $105, at a premium of $600. One call option is made up of 100 shares.
a) what is the net cost(gain) of the position
b) what is the maximum loss
c) what is the maximum gain
d) what is the break even
e) what can the investor do to retain the same profile of the option strategy in the scenario but using put options instead?
lol
Why would the investor want to take advantage of call options if he believes that Company ZZ’s shares will experience a bearish run, why not use put options? Or maybe sell the forward contracts?
According to my understanding, if one believes or expects the share price to go down in value (bearish run), then buying put options will be advantageous.