finance

FIN 4504

Principles of Investments

Spring 2014

StockTrak Assignment 6

We will compare the relative performance of shares, futures and options during the week of April 7-11. Implement the following four transactions on Monday –

1) Buy 500 shares of S&P500 tracking ETF SPY

2) Buy 2 June futures contract for S&P 500 (Globex)

3) Buy 5 calls for SPY expiring on last available date in June 2014 at a strike price of 190.

4) Buy 5 puts for SPY expiring on last available date in June 2014 at a strike price of 190.

On Friday, reverse the above transactions or sell off all the above shares, futures and options in your account.

Tabulate the payment for entering into the transaction, the investment required, the dollar profit /loss and the return for each of the transactions. Comment on the relative investment required and the relative return for the transactions.