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Current stock price is $40. There is no dividend, no commission, and zero interest rate. Below is a current option price table of calls and
Current stock price is $40. There is no dividend, no commission, and zero interest rate. Below is a current option price table of calls and puts with different strike prices: Strike Price Call Premium Put Premium $35 $6 $1 $40 $2.25 $2.25 $45 $1 $6 Let's consider the following option trading strategies: Strategy A): Buy a 40 Call; Sell a 45 call. Strategy B): Sell a 40 Put; Buy a 35 Put. Strategy C): Buy a 45 call; Buy a 35 Put; Sell a 40 Call; Sell a 40 Put. Strategy D): Sell a 40 Call; Sell a 40 Put. Strategy E): Sell a 35 Put; Sell a 45 Call. Strategy F): None of the above. Below is a link to the above information you can open in a separate window. Right click the link, then select "Open Link in New Window". Question 17 (1 point) Which strategy has about 50% probability to earn a profit? Strategy A): Buy a 40 Call; Sell a 45 call. Strategy B): Sell a 40 Put; Buy a 35 Put. Strategy C): Buy a 45 call; Buy a 35 Put; Sell a 40 Call; Sell a 40 Put. Strategy D): Sell a 40 Call; Sell a 40 Put. Strategy E): Sell a 35 Put; Sell a 45 Call. Strategy F): None of the above. Question 18 (1 point) Which strategy requires you to pay a debit when creating it? Strategy A): Buy a 40 Call; Sell a 45 call. Curata D. Call AND. DARD
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