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A bull spread on the euro constructed by trading two calls with maturity 1 year: -buy a Call on Euro with Exercise price K =
A "bull" spread on the euro constructed by trading two calls with maturity 1 year:
-buy a Call on Euro with Exercise price K = 1.54$/
-sell a Call on Euro with Exercise price K = 1.57$/
The options' premium are 0.013$ and 0.0242$ and their size is 62,500. We assume that the premium of both options are paid at maturity.
Plot the payoff diagram and the profit and loss diagram (including the premium) of the position
What is the maximum profit at maturity that a trader can win on this bull spread?
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