Question
26. Look at the following information. (10 pts) Security Qty Bid Ask Cisco Systems, Inc. $57.02 $57.04 CSCO 14 JAN 2022 57 CALL 10 $0.35
26. Look at the following information. (10 pts)
| Security | Qty | Bid | Ask |
| Cisco Systems, Inc. | $57.02 | $57.04 | |
| CSCO 14 JAN 2022 57 CALL | 10 | $0.35 | $0.41 |
| CSCO 14 JAN 2022 60 CALL | 10 | $0.01 | $0.03 |
| CSCO 14 JAN 2022 57 PUT | 10 | $0.35 | $0.41 |
| CSCO 14 JAN 2022 54 PUT | 10 | $0.01 | $0.04 |
a. If you decide to enter into a bear spread, how would it be structured, and what would the potential profit or loss be?
b. What is the spread's profit-to-loss ratio?
c. What is the breakeven point?
d. How much margin (buying power) does this position require?
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
