A trader has an existing position of 100 shares of AAPL stock at $275. She decides to purchase a 260 put option for $17 and sell a 290 strike call option for $16. Synthetically, this is equivalent to buying a 260/290 bull call spread. Using the properties of put call parity, and ignoring the time value of money function.

What is the effective price she paid for the synthetic bull call spread? 

Answer rating: 100% (QA)

The synthetic bull call spread is created by buying a 260 put option and selling a 290 call ... View the full answer