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Econ 171 PS Set3

The document outlines various financial transactions and metrics, including total amounts invested, cash flows, stock values, and margins for trades. It discusses the exercise of options, market spreads, and the implications of margin calls. Additionally, it highlights the importance of maintaining equity and the stability of market capitalization.

Uploaded by

jiahuijiang
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33 views6 pages

Econ 171 PS Set3

The document outlines various financial transactions and metrics, including total amounts invested, cash flows, stock values, and margins for trades. It discusses the exercise of options, market spreads, and the implications of margin calls. Additionally, it highlights the importance of maintaining equity and the stability of market capitalization.

Uploaded by

jiahuijiang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

1

a Total amount invested


200 5 205

b 210 205 5 I don't exercise it

Total return 5

C stock value 180 strike is 19c

190 205 15
Total return 15

a Total cashflew 10 Cash inflow

b The call is exercised

Icc 12C 2C

2C t Ici Ic

Total net flow to cash outflow


C Totalcash inflan cash inflow
Ic

3
G Best Ask 51
Best Bid 5C

51 50 1
Spread

b Ask depth 50shares

Bid deth Iac shares

C 50 Icc 5ccc

50X49 2450
Receive 5004245c 7450
depth
d Best Ask 51 50shaves Ask part
the same
kept
Bid 49 150shares
Best
Bidpart lost
50 section
e
55751
the
The order already bought
part under price of 55

The order must begreater


than5ccsharIcc 2cct5ctI.cc
ˋ

5cc 5C t
4
a Margin on thistrade
Initial Margin 产
㸑 wdue
ice
75

b Position Value 3ox Ice

3ce Equtyi3ccc
5c.ci25cc

Margin 器 83.33

I will notget a margin call

C Close at 30i

Initial equity 15cc


25CC 15cc Iccc

66.67
return 管
Using
own funds
15Cc 20 75shares

225C
75 3c
225C 1500 75C

oeturn
器 50

5
a 2cx Ice
2ccc

accx509 Icco
Keep

b current value 3ccc

33.3
管 33.3 409 I will get a call

3ccc 5 15cc
1500 2cec 500

I should add
5cc

C loan is Icca in the beginning

Ice 7 0
Ice e
3ccc
Lcan initial
equry
I gain 7ccc from the
Short position

6
a

Value weight index ttnǎh


2
等 3ccc

b
WA 器 33.33

2
WB 毙 cn66.67
market
C No the total cap f B

doesn't change

Market remained the same


Nc eight

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