Use the table below for Costoco Options to answer the following questions:

CALLS PUTS

Strike	Mar	Mar
100	5.50	2.50
105	3.50	3.25

Current the stock price is $98.

1. What are the payoff AND the profit/loss if you wrote 5 put options of Mar 100 contract?
2. Suppose you purchase one 100 call and one 105 put contracts. (I)What is called of your option trading strategy? (ii) What are the maximum loss AND the profit?
3. Construct an appropriate COVERED CALL WRITING strategy using 100 CALL options. Set up the profit/loss table and graph the profit/loss diagram. Identify the breakeven stock prices and the maximum and minimum profits. Explain possible situations under which you may consider this strategy
4. Construct a STRIP strategy (= a portfolio of a long position in one call and two puts with the same strike price and expiration date) using 100 calls and puts. Determine the profits and graph the results. Identify the break even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.
5. Construct a BOX (ALLIGATOR) SPREAD strategy (= a portfolio of buying a bull call spread together with the corresponding bear put spread, with the same strike prices and expiration dates). Recall that bull call spread = long call with a lower strike price + short call with a higher X; bear put spread = long put with a higher X and short put with a lower X. Determine the profits and graph the results. Identify the break-even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.