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Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50.
Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? When would you engage in such a position?
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