Question

You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $59 per share. You want to establish a bullish spread to help limit the cost of your option position. You find the following option quotes:

Wildwoood Corp Underlying Stock price: $59.00
Expiration	Strike	Call	Put
June	54.00	9.40	2.45
June	59.00	4.95	3.90
June	64.00	2.45	8.40

Suppose you establish a bullish spread with the puts. In June the stock's price turns out to be $62. Ignoring commissions, the net profit on your position is _______________.

Answer 1