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An investor anticipates a significant move in the stock price within the next 2 months (5o = $75). He uses call options with strikes at
An investor anticipates a significant move in the stock price within the next 2 months (5o = $75). He uses call options with strikes at 70, 75 & 80 to design a reverse butterfly spread strategy. The prices of the calls are: $8,54 & $1, accordingly. What is the initial money flow? Portfolio Payoff What is his call options portfolio? Please fill in the table below, based on this info. Payoff from Payoff from Payoff from Stock Price ($) Total Payoff Per 1 share Profit Per 1 share S-
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