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In order to speculate in the market, you are considering the following strategies: Strategy...

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Finance

In order to speculate in the market, you are considering the following strategies:

Strategy 1: Long Call option with a strike price of 28500, short put option with a strike price of 27000 Strategy 2: Long Call option with a strike price of 27000, short call option with a strike price of 30000 Strategy 3: Long Call and Long Put with a strike price of 28500

All of the options used are with 6-month maturity. Below is the relevant call and put premiums:

(Leave 2 d.p. for dollar terms answer)

Strike

Call premium

Put premium

27000

2112.39

1093.31

28500

1363.65

1843.82

30000

831.38

2810.8

What is the expected profit of strategy 1,2 and 3 respectively?

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