An investor utilizes a bull call spread by purchasing a call option for a premium of $10. The call option comes with a strike price of $50 and expires in July 2020. At the same time, the investor sells a call option for a premium of $3. The call option comes with a strike price of $70 and expires in July 2020. The underlying asset is the same and is currently trading at $50. Calculate the payoff of this strategies. Draw the graph.

Answer rating: 100% (QA)

First lets understand the elements involved in this particular investment strategy A bull call spread involves purchasing a call option and selling an... View the full answer