Question
Read the following excerpt and draw a profit diagram based on the option positions. Show all the critical points on the diagram. For example, the
Read the following excerpt and draw a profit diagram based on the option positions. Show all the critical points on the diagram. For example, the intercepts on axes, maximum profit or maximum loss.
Shares of a gold producer rose 1.5% today to yet another all-time high of $116.43. We observed activity in the June 2012 contract by one investor who initiated an option strategy on the stock. It appears the trader purchased 13,265 calls at the June $125 strike for an average premium of $5.95 each, against the sale of the same number of calls at the higher June $150 strike for $2.10 apiece
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