Construct profit diagrams or profit tables on expiration to show what position in IBM puts, calls and/or underlying stock best expresses the investors objectives described below. Assume IBM currently sells for $150 so that profit tables for stock prices between $100 and $200 (in $10 increments) are appropriate. Also assume that "at the money" puts and calls cost $15 each.

An investor wants upside potential if IBM increases but wants (net) losses no greater than $15 if prices decline.

An investor wants to capture profits if IBM declines in price but wants a guaranteed limited loss if prices increase.

An investor wants to profit if IBMs upcoming earnings announcement is either unexpectedly good or disappointingly bad.

An investor already owns IBM (at a price of $150) and wants to protect against price declines but wants to retain upside if prices rise. Only one transaction is permitted here.