← Part 1: The life of one option contract

LECTURE 9 COMPANION · PART 2 · SCENARIO LAB

Choose your own trade

Part 1 followed one real contract, the AAPL $130 July 2015 call, from purchase to expiry. Here you pick the contract yourself. Same stock, same real prices, same three months (April to July 2015). Choose a position, choose a strike, and see what your trade would have paid.

1

STEP 1 OF 5

Pick a position

Four ways to use an AAPL option. Two put you on the long side (you own the option, dark blue below), two put you on the short side (you write it and someone else owns it, brick red below). Pick one to start.

2

STEP 2 OF 5

Pick a strike

 

 

3

STEP 3 OF 5

Explore the payoff

Drag the marker (or use the arrow keys once it is focused) to see how your contract's payoff and profit change with the final AAPL price, .

payoff profit
ST 
Payoff/share 
Profit/share 
Profit/contract 
Status 

payoff

profit

breakeven

extremes

4

STEP 4 OF 5

Run the real world

 

5

STEP 5 OF 5

Three quick checks

Click an answer for instant feedback. These three questions do not depend on which position you picked above.

About these numbers. AAPL closing prices are real (Yahoo Finance, 1 April–21 July 2015, rescaled for the 2020 stock split). Every option premium on this page, at every strike and for both calls and puts, is a Black–Scholes reconstruction from that real price and a flat 22% volatility, not a historical quote: no public archive of real 2015 option prices exists. Full method and sources: option-life.html#about-data.

Derivatives · Lecture 9 companion · Part 2 of 2 · fatih.ai