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The current stock price of ABC Corp. is 50. Prices for six-month calls on ABC are given in the table below. Draw a profit diagram
The current stock price of ABC Corp. is 50. Prices for six-month calls on ABC are given in the table below.
Draw a profit diagram (at expiration) of the following strategy: Buy one 40 call, write two 50 calls, buy one 60 call, and write two 70 calls.
Strike Price | Call Price |
40 | 16.5 |
50 | 9.5 |
60 | 4.5 |
70 | 2 |
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