Question
7. This question is slightly harder, but it still builds on the stuff we covered. The difference is that that are more legs (a spread
7. This question is slightly harder, but it still builds on the stuff we covered. The difference is that that are more legs (a spread has two legs, one long leg one short leg) in the positions. Suppose I construct the following position: Long Option #1, short Option #2, short Option #3 and long Option #4.
Option #1 $20 Sep. 30th, 2022 $0.25 P
Option #2 $22 Sep. 30th, 2022 $0.78 P
Option #3 $28 Sep. 30th, 2022 $1.30 C
Option #4 $30 Sep. 30th, 2022 $0.81 C
Is the above position credit position or debit position? At what price range do I obtain the highest profit? If CVNA closes at $30.19, then what is my profit?
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