Analti_Calte

deriv108 Wrote:
-------------------------------------------------------
> Stock: Hop
> # of Shares: 375,000
> Stock Price: $26.20
> September 25.00 Put Price: $0.80.
> September 27.50 Call Price: $0.65.
>
> Based on the provided data only, what is the
> breakeven price for
>
> 1) Protective Put
> 2) Covered call
> 3) Collar
>
> What's common among those strategies?


protective put = 26.20 +.80 = 27.00
covered call = 26.20-.65 = 25.55
Collar = 26.20 + .80-.65 = 26.35

A protective put is long a stock and pujt option
coveread call u are long a stock and short a call option
collar is a protective put that you fund by being short a call