Consider an asset with a current spot price of $50. You sell a one year 10% out of the money call on the asset with a pr
Posted: Thu May 05, 2022 7:00 am
Consider an asset with a current spot price of $50.
You sell a one year 10% out of the money call on the asset with
a premium of $3.
You also buy a one year buy a 10% out of the money put on the
asset with a premium of $4.
Draw the payoff diagram for this structure (the call combined
with the put). At what prices will you breakeven after accounting
for the premium?
You sell a one year 10% out of the money call on the asset with
a premium of $3.
You also buy a one year buy a 10% out of the money put on the
asset with a premium of $4.
Draw the payoff diagram for this structure (the call combined
with the put). At what prices will you breakeven after accounting
for the premium?