Question
There are three types of trading strategies involving options: (1) strategies involving a single option and a stock, (2) spreads involving options of one type
There are three types of trading strategies involving options: (1) strategies involving a single option and a stock, (2) spreads involving options of one type (i.e., two or more calls or two or more puts), and (3) combinations involving both call(s) and put(s). Graph all of the trading strategies involving two assets. In particular, show the following strategies: (A) First asset: Buy a stock for a stock price (asset price) of $41.25 and Second asset: Sell a call with an exercise price of $47.39 for a call price of $5.83 = Buying a covered call. (B) First asset: Sell a stock for a stock price (asset price) of $36.47 and Second asset: Buy a call with an exercise price of $32.83 for a call price of $6.74 = Writing a covered call. (C) First asset: Buy a stock for a stock price (asset price) of $43.72 and Second asset: Buy a put with an exercise price of $47.87 for a put price of $7.31 = Buying a protective put. (D). First asset: Sell a stock for a stock price (asset price) of $36.93 and Second asset: Sell a put with an exercise price of $33.29 for a put price of $6.36 = Writing a protective put.
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