Question
A call option with an exercise price of $60 trading on the Acme options exchange sells for $2. To your amazement, a call option on
A call option with an exercise price of $60 trading on the Acme options exchange sells for $2. To your amazement, a call option on the firm with the same expiration selling on the Apex options exchange but with the exercise price of $62 also sells for $2. If you plan to hold the options position until expiration, devise a strategy to exploit the price anomaly.
Bearish spread: buy a $62 option and write a $60 option | ||
Bearish spread: buy a $60 option and write a $62 option | ||
Bullish spread: buy a $62 option and write a $60 option | ||
Bullish spread: buy a $60 option and write a $62 option |
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