The current copper price is 7580/76 10.
Investors expect the copper market to remain strong in the next two months. He decided to sell a put option in the market. The option contract is 0. 1(3 tons) and the transaction price is 7600. Investors decided to keep their positions until maturity.
Short selling options for warehouse copper (investors sell copper and charge dollars)
The transaction price is 7600
Overdue 1 month
The integral value is 30 dollars
The transaction amount is USD 22,800 = 0. 1 contract * USD 30 * 7,600.
The initial deposit is $22,800 =1%* $22,800.
Option fee 89 1 USD (297 points)
If the copper price is higher than the breakeven point of 7303 (7600-297), investors will make a profit.
Tongdie
The copper price reached 7200 at maturity.
Warehouse closing and settlement
Upon expiration, investors are obliged to repay the option holder 1200 USD. The option fee (89 1 USD) summarizes some costs. The net loss of investors is $309.
Expired spot price 7200
Profit and loss-1200 USD =(7200-7600)* 30 USD * 0. 1.
Total transaction loss -309 USD =- 1200 USD +89 1 USD.
abstract
As the copper price fell to 7200, the options sold by investors were cashed. In the case of short options, investors must repay the option holder 1200 USD, of which 89 1 USD is the option premium received. He lost a total of $309.