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Graph profit and breakeven point for price of Apple stock

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The following option price information can be used to answer questions. Assume interest rates are 2%.

Apple (AAPL) Stock Price $330.67
Option Prices (7-months until expiration)
K Put Call
300 22.05 22.05
330 34.90 36.50
360 51.60 23.35

1. Graph the Profit of the following positions at expiration as a function of stock price. Compute the maximum profit, loss and breakeven point of each.

a. A long stock purchase.
b. A long stock and a short put (K=300).
c. A long stock and a short call (K= 360)

2. Compute percentage gain or loss for each of the positions in #1 if the stock price in 7 months is $250. Repeat for a price of $400.

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Solution Summary

This solution provides assistance in graphing Apple's profit and breakeven point.

$2.19