Question
A stock is currently priced at $130. The following options, with expiration in 4 months, are...
A stock is currently priced at $130. The following options, with expiration in 4 months, are available:
| K | c | p |
| 120 | 12.80 | 1.85 |
| 125 | 8.65 | 3.11 |
| 130 | 5.05 | 4.85 |
| 135 | 2.61 | 7.55 |
| 140 | 1.10 | 11 |
Use put options with strike prices of 125 and 135 to create a bear spread.
(a) If the stock price in 3 months is $128, what is your payoff?
(b) What is your maximum possible payoff and when does it occur?
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Similar Questions
A stock is currently priced at $130. The following options, with expiration in 4 months, are...
A stock is currently priced at $130. The following options, with
expiration in 4 months, are available:
K
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8.41
1.18
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3.82
5.58
3.08
4.13
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The following prices are available for call and put options on a stock priced at $50....
The following prices are available for call and put options on a
stock priced at $50. The risk-free rate is 6 percent and the
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June
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June
45
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3.82
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