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Consider call options on the same stock with the same maturity date. You bought a call option with a strike price of $60 and sold
Consider call options on the same stock with the same maturity date. You bought a call option with a strike price of $60 and sold another call option with a strike price of $81 for $6.13 and $2.74, respectively. This strategy is called a bull spread.
1)
What is your payoff if the stock price is $70.5 on the expiration date?
2)What is your profit if the stock price is $70.5 on the expiration date?
3)What is your payoff if the stock price is $86 on the expiration date?
4)
What is your profit if the stock price is $86 on the expiration date?
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