The $[K]-strike put with [d] days until expiration has a pre…

The $[K]-strike put with [d] days until expiration has a premium of $[P]. The underlying currently trades at $[S]. What is the maximum loss a trader can suffer if they hold a long position in option until expiration? Enter your answer as a dollar amount, rounded to the nearest $0.01. Assume 252 trading days in a year. If the option’s net payoff is unbounded, enter 1,000,000.

A trader takes a long position in 2 call option contracts on…

A trader takes a long position in 2 call option contracts on NFLX, each with a premium of $5.00 and a contract size of 100 shares. The trader pays $1,000 in initial capital. When the position is closed, the option is worth $9.50 per share. What is the trader’s return on capital, assuming continuous compounding?