You are provided with two different tables of option prices. Please make sure to use the right table for each question. Draw the option strategy of each sub-question in a new graph, unless explicitly asked otherwise in the question. Hereby, Make sure to draw each graph clean and accurate, and with proportional and proper measurements. Dont forget to label the axis.

5. a) Build a Butterfly spread with put options only at the following strike prices: $180, $195, $210. Mark the maximum profit(s), maximum loss(es), the break-even point(s) and the slopes.

b) What are you speculating on when you invest in the butterfly spread? (12 words max)

Table 9.5 Prices of IBM Puts and Calls At the close on Friday, November 23, 2012 IBM stock price at close = $193.49 A. January Expiration Calls Puts 1.87 Intrinsic Time Value Intrinsic Time Value Strike Price Call Price Value of Call Put Price Value of Put $180 $14.72 $13.49 $1.23 $ 1.29 $ 0.00 $1.29 185 10.36 8.49 2.17 0.00 2.17 190 6.70 3.49 3.21 3.59 0.00 3.59 195 4.00 0.00 4.00 5.77 1.51 4.26 200 2.00 0.00 2.00 9.00 6.51 2.49 210 0.40 0.00 0.40 17.40 16.51 0.89 B. Strike Price of 190 Calls Puts Expiration Intrinsic Time Value Intrinsic Time Value Month Call Price Value of Call Put Price Value of Put Dec 5.22 | 3.49 1.73 1.79 0.00 1.79 Jan 6.70 3.49 3.21 3.59 0.00 3.59 Apr 9.77 3.49 6.28 7.54 0.00 7.54 Intrinsic value of a call = Stock price - Strike price, or zero, whichever is larger. Intrinsic value of a put = Strike price - Stock price, or zero, whichever is larger. Time value of the option = Option price - Intrinsic value. Table 9.5 Prices of Apple Puts and Calls At the close on Friday, January 15, 2016 Apple stock price close = $97.13 A. March 18 Expiration Calls Puts Time Value of Call Intrinsic Value Time Value of Put Put Price $2.92 3.75 4.75 Intrinsic Strike Price Call Price Value 90.00 $9.70 $7.13 92.50 8.05 4.63 95.00 6.50 2.13 97.50 5.150.00 100.00 4.02 0.00 105.00 2.28 0.00 B. Strike Price of 95 Calls $2.57 3.42 4.37 5.15 4.02 2.28 $2.92 3.75 4.75 6.00 7.30 10.54 $0.00 0.00 0.00 0.37 2.87 7.87 5.63 4.43 2.67 Puts Expiration Intrinsic Time Value Intrinsic Time Value Date Call Price Value of Call Put Price Value of Put Feb 12 5.75 2.13 3.62 3.60 0 .00 3.60 Mar 18 6.50 2.13 4.37 4.75 0.00 4.75 Jul 15 9.512.13 7.388 .00 10.00 8.00 Intrinsic value of a call = Stock price -Strike price, or zero, whichever is larger Intrinsic value of a put= Strike price - Stock price, or zero, whichever is larger Time value of the option = Option price-Intrinsic value