Compute the initial inflow/outflow of money from the strategy, tabulate the payoff of each option involved...
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Compute the initial inflow/outflow of money from the strategy, tabulate the payoff of each option involved in the strategy, in each of the relevant regions. Finally, draw the payoff diagram. What type of bet are you taking with each strategy? What are the break-even points? Strategy 1: Buy a TSLA put, strike $150 Sell a TSLA put, strike $155 Sell a TSLA call, strike $170 Buy a TSLA call, strike $175 @ $6.00 @ $7.55 @ $7.70 @ $6.05 Net profit-$3.2 Strategy 2: Sell a TSLA put, strike $150 @$5.85 Buy a TSLA put, strike $155 Buy a TSLA call, strike $170 Sell a TSLA call, strike $175 @ $7.70 @ $7.85 @ $5.90 Net cost-$3.8 Compute the initial inflow/outflow of money from the strategy, tabulate the payoff of each option involved in the strategy, in each of the relevant regions. Finally, draw the payoff diagram. What type of bet are you taking with each strategy? What are the break-even points? Strategy 1: Buy a TSLA put, strike $150 Sell a TSLA put, strike $155 Sell a TSLA call, strike $170 Buy a TSLA call, strike $175 @ $6.00 @ $7.55 @ $7.70 @ $6.05 Net profit-$3.2 Strategy 2: Sell a TSLA put, strike $150 @$5.85 Buy a TSLA put, strike $155 Buy a TSLA call, strike $170 Sell a TSLA call, strike $175 @ $7.70 @ $7.85 @ $5.90 Net cost-$3.8
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Answer rating: 100% (QA)
Strategy 1 Initial cash outflow 6 755 770 605 320 Payoff per contract in each regi... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
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