Margie Noverro is a junior analyst in the derivatives research division of an international securities firm.Noverro's supervisor, Stan Dardevian, asks her to conduct an analysis of various options trading strategies relating to shares of three companies:IZD,QWY, andXDF.

On 1 February, Noverro gathers selected option premium data on the companies, which is presented in Exhibit 1.

EXHIBIT 1 Share Price and Options Premiums as of 1 February (share prices and option premiums are in Euros

Share Price Call Premium Option Date/ Put Premium Strike 9.45 April/87.50 1.67 IZD 93.93 2.67 April/95.00 4.49 1.68 April/97.50 5.78 4.77 April/24.00 0.35 QWY 28.49 3.96 April/25.00 0.50 0.32 April/31.00 3.00 0.23 February/80.00 5.52 XDF 74.98 2.54 April/75.00 3.22 2.47 December/80.00 9.73