The table on the left shows the prices of calls and puts at different strike prices of options on Alphabet Inc. (GOOG) on 14th March 2019. The expiration of all options is the same - September 20, 2019. The market price of the GOOG stock on 14th March 2019 is $1,185.55. Remember to make buy or sell decisions of options based on bid/ask prices (not the last prices).

Answer the following questions:

1. a) Calculate profits of long bull spreads using call and put options with strike prices of $1,125 and 1,240 if the GOOG share price becomes $1,210.55 on the expiration.

b) At what price(s) would profit be zero in both strategies? Show your calculations.

c) What can you conclude about bull strategies using call and put options? Comment on what would happen if you would devise long bear spread strategies using the same call and put options.

d) What strategy can you devise with the same strike prices using call and put if you believe the stock prices can go up to $1,400 or more or can go down to $1,000 or less? Explain and calculate the profits of the strategy. At what price ranges would your loss be maximum? Compare the outcome of the strategy with another strategy when you use a single strike price of $1,220.

Contract Name	Last Trade Date	Strike	Last Price	Bid	Ask	Volume	Open Interest
GOOG190920C01000000	2019-03-12 12:53PM EDT	1000	225.8	214.1	216.9	1	9
GOOG190920C01025000	2019-02-04 11:00AM EDT	1025	158.9	196	198.3	0	1
GOOG190920C01050000	2019-03-14 9:46AM EDT	1050	178.1	172.9	175.6	2	9
GOOG190920C01075000	2019-03-12 9:59AM EDT	1075	159.5	153.5	156.2	1	15
GOOG190920C01100000	2019-03-13 10:01AM EDT	1100	144.73	134.9	137.7	2	12
GOOG190920C01125000	2019-03-05 1:02PM EDT	1125	98.35	117.7	120.3	1	19
GOOG190920C01150000	2019-03-13 10:01AM EDT	1150	110.22	101.6	104.1	1	23
GOOG190920C01175000	2019-03-13 3:58PM EDT	1175	92.26	86.7	89.1	3	34
GOOG190920C01220000	2019-03-14 1:12PM EDT	1220	66.8	63.5	65.4	2	86
GOOG190920C01240000	2019-03-13 12:55PM EDT	1240	60.8	54.5	56.3	43	127
GOOG190920C01300000	2019-03-14 12:12PM EDT	1300	34.45	32.8	34.3	4	135
GOOG190920C01340000	2019-03-14 1:43PM EDT	1340	24.14	20.5	23.8	2	1,321
GOOG190920P01000000	2019-03-14 3:07PM EDT	1000	15.55	15.3	16.5	5	98
GOOG190920P01025000	2019-03-08 1:58PM EDT	1025	31.45	19.2	20.9	9	22
GOOG190920P01050000	2019-03-13 2:08PM EDT	1050	21.5	21.5	26	5	38
GOOG190920P01075000	2019-03-13 2:06PM EDT	1075	26.39	27	32	3	13
GOOG190920P01100000	2019-03-14 1:50PM EDT	1100	34.8	35.2	38	1	67
GOOG190920P01125000	2019-03-14 1:51PM EDT	1125	42.1	42.6	44.1	1	29
GOOG190920P01150000	2019-03-13 1:04PM EDT	1150	47.52	51.2	52.8	7	44
GOOG190920P01175000	2019-03-14 3:00PM EDT	1175	60.35	61.1	62.9	10	2
GOOG190920P01220000	2019-03-12 10:45AM EDT	1220	79.4	82.5	84.5	12	19
GOOG190920P01240000	2019-03-11 1:17PM EDT	1240	108.68	93.5	95.6	1	2
GOOG190920P01300000	2019-03-11 11:36AM EDT	1300	152.3	132.5	134.9	1	0
GOOG190920P01340000	2019-03-14 1:43PM EDT	1340	159.82	163.1	165.7	2	2