In December, you believe that OPK Company, which is currently trading at $125 per share, will drop to $110 per share or less over the next month or two.  You sell 20 OPK January $128 Calls for a premium of $5.00.  At the same time you buy 20 OPK January $135 Calls at a premium of $1.25 (sell January calls with a strike of $128 and $5.00 premium and buy 20 January Calls with a strike of $135 and premium of $1.25).  Determine your gain or loss if:

the stock price decreases to $110 per share at expiration
the stock price decreases to $100 per share at expiration
the stock price increases to $127 per share at expiration
the stock price increases to $150 per share at expiration
the stock price increases to $133 per share at expiration
the stock price decreases to $131.75 per share at expiration

Answer rating: 100% (QA)

1 Stock price decreases to 110 per share at expiration The sold 128 Calls expire out of the money and have no intrinsic value The bought 135 Calls als... View the full answer