Question
Boston Inc stock is currently valued at $39. An investor buys a single call option on the stock with a strike price of $40 and
Boston Inc stock is currently valued at $39. An investor buys a single call option on the stock with a strike price of $40 and sells a single call option on the stock with a strike price of $42.50. The market prices of the options are $2.75 for the bought call option and $1.50 for the written call. The options have the same maturity date. Indicate what type of option trading strategy is, the minimum profit, and maximum profit. Draw a diagram to demonstrate this.
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
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