EXERCISE #5: Optional: Option Strategies. Fri, Feb 22 Data on UTX: Jan 2014 K=100 Calls: Jan 2014 K=85 Puts: Stock closes at $90.49 Bid 2.25/ Ask 2.34 Bid 5.10/ Ask 5.20 You own 1000 UTX worth $90,490. You are afraid the stock might drop precipitously. You sell 10 K=10 calls for $2.25/share. You receive $2,250. You buy 10 K=85 puts for $5.20/share. You pay $5,200. Net you pay $2,950. 70 80 97 In Jan 2014 stock is at S= Gain/Loss on Stock Gain/Loss on Option