A Ford put option with strike price 60 trading on the Acme options exchange sells for $2 To your amazement, a Ford put with the same maturity selling on the Apex options exchange but with strike price 62 also sells for $2 If you plan to hold the options positions to maturity, devise a zero net inve...

a Buy the X 62 put which should cost more but does not and write the X 60 pu ...

A Ford put option with strike price 60 trading on the Acme options exchange sells for $2.

Question:

A Ford put option with 60 trading on the Acme options exchange sells for $2. To your amazement, a Ford put with the same selling on the Apex options exchange but with 62 also sells for $2. If you plan to hold the options positions to devise a zero-net-investment arbitrage strategy to exploit the pricing anomaly. Draw the profit diagram at for your position.

Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...