4. The following information refers to the FTSE 100 index and its derivatives on Thursday 9th...

 

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4. The following information refers to the FTSE 100 index and its derivatives on Thursday 9th December 2021. Spot (a) FTSE 100 Spot Futures FTSE 100 Mar 2022 Futures REQUIRED: Options FTSE 100 Mar 2022 7300 Call FTSE 100 Sep 2021 7300 Put 7336 7270 228 256 Use the information in the table above to construct one futures trade of 10 contracts and one options trade of 10 contracts to profit if you are bullish on the prospects of the FTSE 100 Index over the next few months. Explain how you derive your trading strategy. Calculate and plot your payoff profiles from the trades for the following possible levels for the FTSE 100 index at the maturity date in March 2022: 6600; 7000; 7300; 7600; 8000. (8 marks) 4. The following information refers to the FTSE 100 index and its derivatives on Thursday 9th December 2021. Spot (a) FTSE 100 Spot Futures FTSE 100 Mar 2022 Futures REQUIRED: Options FTSE 100 Mar 2022 7300 Call FTSE 100 Sep 2021 7300 Put 7336 7270 228 256 Use the information in the table above to construct one futures trade of 10 contracts and one options trade of 10 contracts to profit if you are bullish on the prospects of the FTSE 100 Index over the next few months. Explain how you derive your trading strategy. Calculate and plot your payoff profiles from the trades for the following possible levels for the FTSE 100 index at the maturity date in March 2022: 6600; 7000; 7300; 7600; 8000. (8 marks)

Answer rating: 100% (QA)

Sure heres a bull call spread strategy for the FTSE 100 index Trade 1 Buy 10 FTSE 100 Mar 2022 Futur... View the full answer