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You're extremely bearish on the stock. To reflect this view, you implement a bear put spread strategy, which involves buying an ATM put and selling
You're extremely bearish on the stock. To reflect this view, you implement a bear put
spread strategy, which involves buying an ATM put and selling an OTM put. Currently price
is $ The following information is given. Write the profits under appropriate stock price St regimes. Examples of price regimes: St$; $ $ St $
What is are the breakeven points
What is the maximum profit, and at what stock price or give a range of stock price does the maximum profit occur?
What is the maximum loss, and at what stock price or give a range of stock price does the maximum loss occur
Sketch graph linking profits or losses to stock price at expiry showing clearly on the Xaxis and Yaxis i the prices at which the kinks occur, ii the breakeven pointsiii the maximum loss, and iv the maximum profit.
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