Consider the following options portfolio. You write a January expiration call option on IBM with...
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Finance
Consider the following options portfolio. You write a January expiration call option on IBM with exercise price $195. You write a January IBM put option with exercise price $190.
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Present on a table the payoff of this portfolio at option expiration
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If the call premium is $0.01 and put premium is $1.75, at what two stocks prices you will just break even on your investment.
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What kinf of "bet" is this investor making, that is , what must this investor believe about IBM's stock price to justify this position?
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Excel:
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Graph the payoff and profit of your strategy.
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