ssume you purchased the right to sell 2,000 shares of Target stock in February 2022 at a strike price of $240 per share. Suppose Target stock sells for $212 per share immediately before your options’ expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $268 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as a percent rounded to 2 d

Quickbooks Online Accounting
3rd Edition
ISBN:9780357391693
Author:Owen
Publisher:Owen
Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 2.1C
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Assume you purchased the right to sell 2,000 shares of Target stock in February 2022 at a strike price of $240 per share. Suppose Target stock sells for $212 per share immediately before your options’ expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $268 per share (think about it)? Assume your holding period for this investment is exactly three months.

 

Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as a percent rounded to 2 decimal places.

TGT US Equity 95) Actions 96) Export. 97) Settings.
TARGET CORP
-5.845
216.12 Strikes
Center
Calc Mode
ID Center Strike
Calls/Puts 83 Calls
1215.875
5 Exp 21-Jan-22
DTGT 1/21/22 C210
2) TGT 1/21/22 C212.5
Ticker
Bid
21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06
5.80
3.65
1.77
56
15
3) TGT 1/21/22 C215
4 TGT 1/21/22 C217.5
5) TGT 1/21/22 C220
10 Puts
Calls
10.00
4.60
1.76
.62
Ask
7.40
6.10
2.28
.89
.26
-2.6362%
Exch US Composite
As of
19 Term Structure
21.60
13.80
8.65
5.15
2.95
18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
TGT 2/18/22 C200
17.55
20.00
7) TGT 2/18/22 C210
10.25
4.90
TGT 2/18/22 C220
TGT 2/18/22 C230
100 TGT 2/18/22 C240
1.96
.73
Last
21-Jan-2022
7.35
6.65y
2.10
80
21
28.50y
10.80
18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
10) TGT 3/18/22 C200
20.15
12 TGT 3/18/22 C210
13.45
13) TGT 3/18/22 C220
8.35
14 TGT 3/18/22 C230
4.85
15) TGT 3/18/22 C240
2.70
5.15
1.98
72
215.82/215.99
29.00y
14.25
9.65
5.10
2.85
Moneyness
IVM
118.18
130.35
66.42
64.54
60.19
37.18
29,19
27.75
27.49
28.22
35.07
32.58
31.34
31.07
31.08
Volm
Hi 220.34
92) 03/02/22 E | ERN >>
Strike
Lo 215.76
Ticker
Bid
21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06
4210.00 50 TGT 1/21/22 P210
.18
.44
212.50 52 TGT 1/21/22 P212.5
5215.00 530 TGT 1/21/22 P215
77217.50 50 TGT 1/21/22 P217.5
62 220.00 55) TGT 1/21/22 P220
5-
Puts
.89
1.96
3.90
Volm 717042
Ask
31
.59
1.22
2.46
4.55
2.20
4.75
9.55
16.90
25.95
Last
18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
200.00 56 TGT 2/18/22 P200
10 210.00 57) TGT 2/18/22 P210
2.10
4.45
9.15
62 220.00 58 TGT 2/18/22 P220
79 230.00 59 TGT 2/18/22 P230
102 240.00 600) TGT 2/18/22 P240
.30
.50
1.00
2.30
4.00
5.15
8.50
13.45
19.80
27.80
2.10
4.60
9.40
16.30
23.85
18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
200.00 61) TGT 3/18/22 P200
16 210.006) TGT 3/18/22 P210
5.00
8.30
12.85
20 220.00 63) TGT 3/18/22 P220
35 230.00 60 TGT 3/18/22 P230
19.15
16 240.00 65) TGT 3/18/22 P240
26.05
16.37
23.78
4.95
8.35
12.55
18.49
25.83
Option Monitor
HV 25.09
IVM
87.48
77.91
63.96
60.30
56.40
32.04
29.45
27.52
27.01
16.79
34.16
32.35
31.34
30.06
28.44
Volm
58
36
202
86
149
44
462
34
28
20
18
38
6
9
5
Transcribed Image Text:TGT US Equity 95) Actions 96) Export. 97) Settings. TARGET CORP -5.845 216.12 Strikes Center Calc Mode ID Center Strike Calls/Puts 83 Calls 1215.875 5 Exp 21-Jan-22 DTGT 1/21/22 C210 2) TGT 1/21/22 C212.5 Ticker Bid 21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06 5.80 3.65 1.77 56 15 3) TGT 1/21/22 C215 4 TGT 1/21/22 C217.5 5) TGT 1/21/22 C220 10 Puts Calls 10.00 4.60 1.76 .62 Ask 7.40 6.10 2.28 .89 .26 -2.6362% Exch US Composite As of 19 Term Structure 21.60 13.80 8.65 5.15 2.95 18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32 TGT 2/18/22 C200 17.55 20.00 7) TGT 2/18/22 C210 10.25 4.90 TGT 2/18/22 C220 TGT 2/18/22 C230 100 TGT 2/18/22 C240 1.96 .73 Last 21-Jan-2022 7.35 6.65y 2.10 80 21 28.50y 10.80 18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36 10) TGT 3/18/22 C200 20.15 12 TGT 3/18/22 C210 13.45 13) TGT 3/18/22 C220 8.35 14 TGT 3/18/22 C230 4.85 15) TGT 3/18/22 C240 2.70 5.15 1.98 72 215.82/215.99 29.00y 14.25 9.65 5.10 2.85 Moneyness IVM 118.18 130.35 66.42 64.54 60.19 37.18 29,19 27.75 27.49 28.22 35.07 32.58 31.34 31.07 31.08 Volm Hi 220.34 92) 03/02/22 E | ERN >> Strike Lo 215.76 Ticker Bid 21-Jan-22 (0d); CSize 100; R .26; IFwd 216.06 4210.00 50 TGT 1/21/22 P210 .18 .44 212.50 52 TGT 1/21/22 P212.5 5215.00 530 TGT 1/21/22 P215 77217.50 50 TGT 1/21/22 P217.5 62 220.00 55) TGT 1/21/22 P220 5- Puts .89 1.96 3.90 Volm 717042 Ask 31 .59 1.22 2.46 4.55 2.20 4.75 9.55 16.90 25.95 Last 18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32 200.00 56 TGT 2/18/22 P200 10 210.00 57) TGT 2/18/22 P210 2.10 4.45 9.15 62 220.00 58 TGT 2/18/22 P220 79 230.00 59 TGT 2/18/22 P230 102 240.00 600) TGT 2/18/22 P240 .30 .50 1.00 2.30 4.00 5.15 8.50 13.45 19.80 27.80 2.10 4.60 9.40 16.30 23.85 18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36 200.00 61) TGT 3/18/22 P200 16 210.006) TGT 3/18/22 P210 5.00 8.30 12.85 20 220.00 63) TGT 3/18/22 P220 35 230.00 60 TGT 3/18/22 P230 19.15 16 240.00 65) TGT 3/18/22 P240 26.05 16.37 23.78 4.95 8.35 12.55 18.49 25.83 Option Monitor HV 25.09 IVM 87.48 77.91 63.96 60.30 56.40 32.04 29.45 27.52 27.01 16.79 34.16 32.35 31.34 30.06 28.44 Volm 58 36 202 86 149 44 462 34 28 20 18 38 6 9 5
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