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P. 1
Option Strategies

Option Strategies

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Published by Shankey

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Published by: Shankey on Apr 23, 2011
Copyright:Attribution Non-commercial

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10/26/2012

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ICFAI UNIVERSITY 
DEHRADUN
Name:
Gopal Krishan
Enroll
me
nt
N
o.
09BS0002792
IUD
N
o
:
 
0901202792
Cours
e
Cod
e:
 
SLFI608
 Cours
e
 
Name:
 
Financial Risk Management
 F
ac
ulty
Name:
 
C. M. Madtha
 D
a
t
e:
November 05, 2010
Ti
tl
e
of th
e
 
a
ss
ig
n
me
nt
:
 
Option strategies payoff diagrams for Siemens
 
Sign Student Sign Faculty
 
Buy ca
ll
opt
i
on for S
i
ns exp
i
r
i
ng26
th
Aug, 2010
S
t
  
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¡  ¢  
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Spo
t P
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off 
P
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of 
it
& Loss620 109.25 340 0 -109.25620 109.25 380 0 -109.25620 109.25 420 0 -109.25620 109.25 460 0 -109.25620 109.25 500 0 -109.25620 109.25 540 0 -109.25620 109.25 580 0 -109.25620 109.25 620 0 -109.25620 109.25 660 40 -69.25620 109.25 700 80 -29.25620 109.25 740 120 10.75620 109.25 780 160 50.75620 109.25 820 200 90.75620 109.25 860 240 130.75
-150
-100-50
050
100150
200250300
Buy Ca
ll
Opt
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on for S
i
emens
Payoff d
i
agram
P
¨©  
off 
P
  
of 
it
& Loss
Th
i
s s
t t
can be used by an
i
nves
t
or who
i
s very bu
lli
sh on
t
he marke
t
. Under 
t
h
i
s s
t
ra
t
egy
t
he
i
nves
t
or pays
t
he se
ll
er of 
t
heop
ti
on a prem
i
um
t
o buy anop
ti
on
t
o buy shares a
t
a pr 
i
ce
i
nfu
t
ure.The s
t
i
ke pr 
i
ce of 
t
h
i
s op
ti
on
t
o buy
i
s
Z
620 and
t
he prem
i
um for 
t
he con
t
rac
t
 
i
s
Z
109.25.The breakeven po
i
n
t
for 
t
hecon
t
rac
t
 
i
s
III
Th
i
s s
t
ra
t
egy
li
m
it
s
t
he
l
osses a
t
 
t
he
l
ower 
l
eve
l
 
t
o
t
he ex
t
en
t
of 
t
he prem
i
um
t
o be pa
i
d and
t
here areno
li
m
it
s
t
o
t
he prof 
it
s
i
f pr 
i
cesmove h
i
gh.
 
Se
ll
ca
ll
opt
i
on for S
i
emens exp
i
r
i
ng26
th
Aug, 2010
S
t
i
ke
P
i
ce
P
rem
i
um Spo
t
 
P
i
ce
P
ayoff 
P
rof 
it
&Loss
620 109.25 340 0 109.25620 109.25 380 0 109.25620 109.25 420 0 109.25620 109.25 460 0 109.25620 109.25 500 0 109.25620 109.25 540 0 109.25620 109.25 580 0 109.25620 109.25 620 0 109.25\620 109.25 660 -40 69.25620 109.25 700 -80 29.25620 109.25 740 -120 -10.75620 109.25 780 -160 -50.75620 109.25 820 -200 -90.75620 109.25 860 -240 -130.75
-300-250-200-150
-100-50050100
1501234567891011121314
Se
ll
ca
ll
opt
i
on for S
i
emens
Payoff D
i
agram
P
ayoff 
P
rof 
it
& Loss
Th
i
s s
t
ra
t
egy can be used by an
i
nves
t
or who
i
s very bear 
i
sh on
t
he marke
t
. Under 
t
h
i
s s
t
ra
t
egy
t
he se
ll
er rece
i
ves prem
i
um andse
ll
s a
i
gh
t
 
t
o
t
he buyer 
t
o buyshares
i
f pr 
i
ces r 
i
se above
t
hes
t
i
ke pr 
i
ce.The s
t
i
ke pr 
i
ce of 
t
h
i
s op
ti
on
t
o buy
i
s
Z
620 and
t
he prem
i
um for 
t
he con
t
rac
t
 
i
s
Z
109.25.The breakeven po
i
n
t
for 
t
hecon
t
rac
t
 
i
s
III
from
t
he po
i
n
t
of ca
ll
  buyer 

Th
i
s s
t
ra
t
egy
li
m
it
s
t
he ga
i
ns
t
o
t
he amoun
t
of prem
i
um rece
i
ved bu
t
 
t
he
l
osses can be un
li
m
it
ed.Thus
it
 
i
s a h
i
gh
l
y
i
sky andaggress
i
ve s
t
ra
t
egy usua
ll
yfo
ll
owed by an person who
i
svery bear 
i
sh on marke
t
.
 

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