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Put premium = $5 at X2 = 30 at time of spread purchase Put premium = $3 at X1 = 35 at time of spread
Put premium = $5 at X2 = 30 at time of spread purchase
Put premium = $3 at X1 = 35 at time of spread purchase
1. Now create the same kind of strategy using put options with different strike prices and premium (a) What option position in a put (long or short) is required at strike price X2? How many options? Draw. (b) What option position in put (long or short) is required at strike price X1? How many options? Draw and then combine drawing with 1.a (c) What is the net cost to create the strategy with puts?
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