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Six-month put options with strike prices of $40 and $45 cost $3 and $5, respectively. You plan to create a bull put spread (buying K1
- Six-month put options with strike prices of $40 and $45 cost $3 and $5, respectively. You plan to create a bull put spread (buying K1 put & selling K2 put) by trading 100 options for each put, which deals with 10,000 shares. Answer the following questions.
Total cost of the spread:
Maximum loss of the spread:
Maximum gain of the spread:
Break-even stock price of the spread:
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