Suppose shortly after you purchased an XYZ September 50 call contract at ($ 3) per call, the
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Suppose shortly after you purchased an XYZ September 50 call contract at \(\$ 3\) per call, the price of XYX increased to \(\$ 57\) causing the price of your call to rise to \(\$ 9\) per call. Evaluate in terms of their profit and stock price relations the following follow-up actions you could pursue:
a. Liquidate
b. Do nothing
c. Spread by selling the XYX 60 call trading at \(\$ 3\) per call
d. Roll up by selling your 50 call and using the profit to buy two XYZ calls at \(\$ 3\) per call Evaluate the strategies at expiration stock prices of \(\$ 40, \$ 45, \$ 50, \$ 55, \$ 60\), \(\$ 65, \$ 70, \$ 75\), and \(\$ 80\).
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