Suppose that both a call option and a put option have been written on a stock with an exercise price of $40. The current stock price is $42, and the call and put premiums are $3 and $0.75, respectively. Calculate the profit to positions of both the short call and the long put with an expiration day stock price of $43.
Suppose that both a call option and a put option have been written on a stock with an exercise
price of $40. The current stock price is $42, and the call and put premiums are $3 and $0.75,
respectively. Calculate the profit to positions of both the short call and the long put with an expiration day stock price of $43.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Could you give further explanation in the meaning of "Min(X-S,0)" in Profit from Call Option equation & "Max(X-S,0)" in Profit from Put Option equation above for who has little basic concept of option and stock?
- What's make investor decide to short option because I see that short position has more chance to loss the money, what's occur before between open long status and short status in the same strike price?
- What's called spot price? $42 or $43
by Bartleby Expert
