An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor sells a call for $.50 with a strike price of $40. What is the maximum profit and loss for this position? Draw the profit and loss diagram for this strategy as a function of the stock price at expiration.
An investor purchases a stock for $38 and a put for $.50 with a strike price of $35. The investor sells a call for $.50 with a strike price of $40. What is the maximum
position? Draw the profit and loss diagram for this strategy as a function of the stock price at expiration.
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According to the equation and option payoff diagram in my textbook that I’ve attached, I don’t understand why you didn’t concern about premium in your answering ( I’m also confused that in this case investor purchases stock for $38 and short put option with $0.5 premium, and also short call option with $0.5 premium or not). Please illustrate your calculations of
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