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Derivatives Management Question A portfolio has been created with options maturing on 27 August, 2019 on Reliance stock as follows. a)One long call at strike

Derivatives Management Question

A portfolio has been created with options maturing on 27 August, 2019 on Reliance stock as follows.

a)One long call at strike price Rs. 1160 and option price of Rs. 21.20 each

b)Two short calls at strike price Rs. 1180 and option price of Rs. 12.35 each

c)One long call at strike price Rs. 1200 and option price of Rs. 7.45 each

Draw the payoff diagram of the portfolio at maturity. What are the break even prices of the underlying stock and what is the maximum profit and at what price of the underlying?

What is the trader's view about the market movement of the underlying asset price?

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