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CSM 404 Module 11 Assignment

This document provides instructions for an investment assignment involving options. Students are asked to select call options on two of their stocks expiring within 3-6 weeks, including an out-of-the-money, at-the-money, and in-the-money call on each. They then report details of each option like intrinsic value, time premium, and maximum potential losses for both the option and underlying stock. The goal is for students to analyze how options can be used to leverage positions but also magnify potential gains or losses.

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61 views1 page

CSM 404 Module 11 Assignment

This document provides instructions for an investment assignment involving options. Students are asked to select call options on two of their stocks expiring within 3-6 weeks, including an out-of-the-money, at-the-money, and in-the-money call on each. They then report details of each option like intrinsic value, time premium, and maximum potential losses for both the option and underlying stock. The goal is for students to analyze how options can be used to leverage positions but also magnify potential gains or losses.

Uploaded by

aklank_218105
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CSM 404: Personal Investment Planning & Management

Module 11 Assignment – Investment Assignment Part 6


Options are a means to leverage your position and increase the potential returns, but they also
magnify the potential for loss.

1. Select two of your ten stocks and locate prices and call options on those stocks that will
expire within 3 to 6 weeks. (Many Internet sites have option prices as well as stock
prices.) Select three call options on each stock and report your findings below.

Company Out-of-the-Money Call At-the-Money Call In-the-Money Call


Apple Inc. / AAPL200515C0029000 AAPL200515C0028250 AAPL200515C00282500
282.97 / 6.71 0 / 9.75 / 18.35
Target TGT200515C00108000 TGT200515C00108000 / TGT200515C00100000 /
Corporation / 1.03 3.10 9.30
/ 107.82

Note: A call whose strike price exceeds the price of the stock (an "out-of-the-money" call). A
call whose strike price approximates the price of the stock (an "at-the-money" call). A call whose
strike price is less than the price of the stock (an "in-the-money" call).

2. Next, report the intrinsic value of each option, the time premium paid for each option, the
maximum you could lose if you bought each option, and the maximum you could lose if
you bought the underlying stock. (show your work)

Apple Inc. AAPL OOM Call ATM Call ITM Call


Intrinsic Value
Time Premium
Max loss if option
purchased
Max loss if stock
purchased

Be sure to properly cite the source of your information. Save your Word document as
“lastname_m11” and upload before clicking Submit.

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