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Here is how the strategy worked in a position established recently on Chinese Internet search company Baidu. The stock was bought for $69.03 a share,
Here is how the strategy worked in a position established recently on Chinese Internet search company Baidu. The stock was bought for $69.03 a share, along with protective $66 puts that expire in January. The January $74 call was also sold. The net cost of the collar is 39 cents per pair of contracts.
What is the maximum gain?
A. 5.46
B. 3.74
C. 4.58
D. 2.93
What is the maximum loss?
A. -4.46
B. -5.18
C. -2.79
D. -3.42
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