Question: At date t, a trader buys a bear spread using two European put options on the same stock. The date t stock price is $35
At date t, a trader buys a bear spread using two European put options on the same stock. The date t stock price is $35 per share. Both put options have the same expiration date, T. The first put option is priced at $2.43 per share and has a strike price equal to $35 per share. The second put option is priced at $0.68 per share and has a strike price equal to $30 per share. At date T, what is the break-even stock price per share?
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