Question
Imagine the following options contracts. There are call and put options available on an underlying with strike prices of 1,950 and 2,050. The shaded values
- Imagine the following options contracts.
There are call and put options available on an underlying with strike prices of 1,950 and 2,050. The shaded values above are the option premiums as of today. The options expire in 1 year.
Suppose you buy the 1,950 call and sell the 2,050 call
- Calculate profit on this strategy for a range of underlying prices at expiration from 200 to 3,000.
- Why is the profit so incredibly low?
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
