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A stock price is currently $23. A butterfly spread (ie. options are bought with strike prices of K1 and K3, and two options with the
A stock price is currently $23. A butterfly spread (ie. options are bought with strike prices of K1 and K3, and two options with the middle strike price K2 are sold) is created from call options with strike prices of $20,$25, and $30. Which of the following is TRUE? Select one alternative: It is incorrect to assume that there is always a gain when the stock price is greater than $30 or less than $20. The loss when the stock price is greater than $30 is the same as the loss when the stock price is less than $20. The gain when the stock price is greater than $30 is greater than the gain when the stock price is less than $20. The gain when the stock price is greater than $30 is less than the gain when the stock price is less than $20
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