Question: A trader creates a bear spread by selling a six-month put option with a $25 strike price for $2.15 and buying a six-month put option

 A trader creates a bear spread by selling a six-month put

A trader creates a bear spread by selling a six-month put option with a $25 strike price for $2.15 and buying a six-month put option with a $29 strike price for $4.75. What is the net payoff per share (enter 4.00. not 400. for one spread - the gross payoff of the spread minus the cost of the spread) when the stock price in six months is $23? Please enter your answer as a number with two decimal places (no dollar sign), and include a negative sign if it is a loss

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!