Question: A trader creates a bear spread by selling one 6-month put option contract with a $25 strike price for $2.15 per option and buying one

A trader creates a bear spread by selling one 6-month put option contract with a $25 strike price for $2.15 per option and buying one 6-month put option contract with a $29 strike price for $4.75 each. What is the total payoff (excluding the initial investment) when the stock price in 6 months is 23.40.

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 Finance Questions!