Question
Please help me complete the questions. Need detailed answers. 1. On a recent day, May Facebook 62 put option was selling for $2.50. Draw a
Please help me complete the questions. Need detailed answers.
1. On a recent day, May Facebook 62 put option was selling for $2.50. Draw a hockey stick diagram for a short position in the Facebook 62 put. Carefully show and label all relevant points on the diagram and the correct numbers associated with those points.
2. If the May Facebook 59 call is selling for $1.25, and the Facebook 60 call is selling for $.75, construct a bear spread using these nearby 59 and 60 calls. (question 2.1+2.2 related to this)
2.1 Construct a table like the one from lecture (Slide 59, April 27) showing profit and loss if the options expire when the stock price is $0, $58, $59, $60, $61, $65, and $70, for each part of the spread, and the net profit or loss for the entire spread position.
2.2. Draw and upload a hockey stick diagram for the spread, clearly labeling all the critical points.
2.1 Construct a table like the one from lecture (Slide 59, April 27) showing profit and loss if the options expire when the stock price is $0, $58, $59, $60, $61, $65, and $70, for each part of the spread, and the net profit or loss for the entire spread position.
2.2. Draw and upload a hockey stick diagram for the spread, clearly labeling all the critical points.
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