Question
You have been looking ESPR for some time, and you are willing to take a chance. The stock is at $ and you see that
You have been looking ESPR for some time, and you are willing to take a chance. The stock is at $ and you see that the following quotes that are of interest to you:
| Call - Bid | Call - Ask | Strike | Put - Bid | Put - Ask |
| 0.55 | 0.75 | 60 | 8.10 | 9.00 |
| 1.70 | 1.95 | 55 | 4.50 | 4.90 |
| 4.00 | 4.30 | 50 | 1.85 | 2.15 |
| 5.80 | 6.40 | 45 | 0.50 | 0.80 |
You decide to write a 60-55-50-45 iron condor. If the probabilities are 68.62% that the price of ESPR will remain within the inner bound of the spread, what is your expected percent return against risk?
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
8th Edition
1264098723, 978-1264098729
