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There are 11 things to answer below, but the question will be worth 10 marks in total] A trader establishes an option-trading strategy as follows:
There are 11 things to answer below, but the question will be worth 10 marks in total] A trader establishes an option-trading strategy as follows: One long call option with a strike price of $20, which has a premium of $1.60, and Two short call options with a strike price of $25, each call having a premium of $0.50, and One long call option with a strike price of $32, which has a premium of $0.10 The upfront cost establish this strategy is Do not enter a +ve or -ve sign for this answer. Just enter the dollar amount. Do not enter the dollar sign ($). In the following questions, enter all answers to 2 decimal places. If the payoff is negative, be sure to enter the negative sign. Be careful to differentiate between gross payoffs and net payoffs. Do not enter dollar signs ($) If the underlying share price expiry is $24: The gross payoff on the long $20 call option is Taken together, the gross payoff to the two short $25 call options is The gross payoff on the long $32 call option is The gross payoff to the option-trading strategy is If the underlying share price at expiry is $35: The gross payoff on the long $20 call option is Taken together, the gross payoff on the two short $25 call options is The gross payoff on the long $32 call option is The gross payoff on to the option-trading strategy is Taking the upfront establishment cost into account, there are two breakeven points for this option-trading strategy. In the two boxes that follow, enter the breakeven points in order from lowest to highest: and Do not enter the dollar sign ($) anywhere in this
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