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A trader wants to form a position by combining two different calls. The calls have the same expiration dates but have different strike prices. The

A trader wants to form a position by combining two different calls. The calls have the same expiration dates but have different strike prices. The trader sells one call with strike of £50 at a price of £1.53, and buys two calls with strike of £52.50 at £0.60 each. 


Demonstrate how to graph the profits from this spread strategy. 


Argue why the trader would want to adopt this strategy. 


Show what are his maximum loss and maximum profits.

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