Finance Question - Puts and Calls?

Question

Finance - Puts and Calls?
Does anyone know how to calculate the following question:

If I was to use the same exercise price for each calculation. And the stock price will increase by 5 from 45 to 60

Write CallOption Price 2.875//// 2.875 ///// 2.875 /// 2.875
Stock Price /////////// 45 /////// 50 //////// 55 //////// 60
Exercise Price ////// 55 /////// 55 //////// 55 /////// 55
Profit Per Share

Buy Put(sell)Option Price 2.625 ///// 2.625 ///// 2.625 ///// 2.625
Stock Price /////////// 45 /////// 50 //////// 55 //////// 60
Exercise Price ////// 55 /////// 55 //////// 55 /////// 55
Profit Per Share

Write PutOption Price 2.625 ///// 2.625 ///// 2.625 ///// 2.625
Stock Price /////////// 45 /////// 50 //////// 55 //////// 60
Exercise Price ////// 55 /////// 55 //////// 55 /////// 55

Answer 1

Usually, practically the option price need not remain steady as depicted, it changes as the option price changes. Any how this is a hypothetical question just conjured out of innocence and might help you to understand the profit lines better.
I answred this question earlier.

Answer 2

I THINK you’re trying to demonstrate a “collar” or a “strangle”, but I’ll do my best to answer your Q.

To go all the way back to the beginning to explain to you - and many others - what a Call is and what a Put is, may be "an exercise in futility".

The only thing I can determine is: as the price of the stock moves, you want the option’s price to remain constant. This is not how options work.

Options work like this:
#1] As the stock moves, the option moves.

#2] As the STOCK’S price moves UP, the price for that CALL at that Strike Price moves UP
AND the price for that PUT at that Strike Price goes DOWN.

#3] The reverse is also true:
As the STOCK’S price moves DOWN,
the price for that PUT at that Strike Price moves UP
AND the price for that CALL at that Strike Price goes DOWN.

You’re looking for a “price per share”. With options, USUALLY, it’s the price per contract or per 100 shares.

I’ll use your example: If the option’s price moves from 2.875 to 2.625 AND you bought the 50 Calls, you would lose
20 cents per share or $20 per contract. .20 X 100 = $20.

From my understanding of your example, you want to “write” Calls and “write” Puts. When you write Calls or write Puts, this means you are selling those Calls or selling those Puts to someone and money is being deposited in your account.

What the stock does after you write those Calls or write those Puts, doesn’t affect you in the least. You already have the money in your account.

UNLESS you are doing a debit spread or a credit spread. BUT I really don’t think you “have your head wrapped around the concept” of options, quite the way I was taught a person should “have his/her head wrapped around” options.

There are some excellent books about trading options and learning how to trade options. If you would like some suggestions, please put me on your contact list and send me the Q, I’ll do my best to answer your Qs.

I THINK I did my best to answer your Q. Thank you for asking your question. I enjoyed taking the time to answer your question. You did a great job - not only for your information, but for every other person interested in reading my answer. Thanks to everyone for reading my answer.

I wish you well!

VTY,
Ron Berue
Yes, that is my real last name.

Answer 3

This question would be better place in Investments. Your question as stated is incomplete. You did not state WHAT you want to calculate.