Question: For the data in the previous problem, the following is an example of a butterfly spread: sell two calls with an exercise price of $50,
For the data in the previous problem, the following is an example of a butterfly spread: sell two calls with an exercise price of $50, buy one call with an exercise price of $40, and buy one call with an exercise price of $60. Simulate the cash flows from this portfolio.
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The term butterfly spread refers to an options strategy that combines bull and bear spreads wit... View full answer
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