Company Current Exercise Time to Maturity

Share Price (RM) Price (RM))

(RM) Call Premium (RM) Put Premium
3-month 6-month 3-month 6-month
XX 52.00 50.00 3.00 4.00 0.35 1.05
YY 40.00 45.00 1.00 1.25 5.50 6.00
ZZ 35.00 30.00 6.00 6.30 0.45 0.65

Use the option’s information given above to answer the questions below. Ignore taxes and
transaction costs. Each contract is equal to 1000 shares.

a) If you purchase ONE 3-month call contract on XX company, what profit or loss will you make
at the maturity date if the price of XX’s share at that time is RM57.00?

57-53＝4x1000=4000

b) If YY’s share price is RM35.00 at the maturity of the 6-month option, determine the value of
purchasing FIVE 6-month put contracts at their maturity date.

35-39(45-6)x5=20k, profit

c) You recently purchased FIVE 3-month call options of the ZZ company. Determine your profit
or loss on the investment if the price of ZZ’s share is RM32.00 at maturity.

32-30+6x5=20k loss

d) If you had purchased FIVE 3-month put on ZZ’s share, what would your profit or loss position
have been at maturity if the share’s price was RM32.00?

Ignore not exercise, loss premium

-Rm 2250

e) You recently shorted FIVE 6-month call options on YY’s share. What is your profit or loss on
the options at maturity if the price of YY’s share at that time is RM43.00?

1.25x1000x5=

Rm6250, premium

f) If you have shorted FIVE 6-month put options on YY’s share, what would your profit or loss
have been at the maturity of the options if the share price was RM43.00 per share?

g) You created a straddle by purchasing ONE 3-month call and put for the XX company.
Determine your profit or loss in 3 months if the price of XX’s share is RM53.00.