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Essay / Sumitomo Case Study - 854
In fact, this contract is equal to Yasuo Hamanaka, a copper short put option bought 0.3 copper call option, and the strike price and the expiration date are the same two types of options and their strike price is equal to the minimum price set by the contract. Therefore, Yasuo Hamanaka should receive a put option premium at the time of entering into the contract, while 0.3 call option premium must be paid. In general, the premium of a put option is not necessarily equal to the premium of a call option of 0.3, but the difference between them depends on the strike price, which is the highest price bottom of the contract size. Since the lowest price is set upwards, the premium of put options increases, while the premium of a call option decreases; on the contrary, the lower the minimum price, the more the put option premium decreases, while the call option premium increases. Therefore, setting the appropriate minimum price in the contract so that the initial contract value is zero. So, at the time of conclusion of the contract, the parties do not have to pay the amount. The contract concluded with Yasuo Hamanaka is as follows. But here he committed an illegal action: the company did not explain what this minimum price was.