Suppose that Getting Berhad shares are currently priced as $45, call options on this shares with strike
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Question:
Suppose that Getting Berhad shares are currently priced as $45, call options on this shares with strike prices of $50 and $70 costs $5 and $3, respectively and you are bullish about the price movement of this stock. How can the options on this stock be used to a bull spread? Construct a diagram and a table that shows the payoff and profit.
Suppose that Sima Dab Berhad shares are currently selling at $60 and put options on these shares with strike prices $45 and $55 cost $5 and $9, respectively and you are bearish about the stock price movements in the short term. How can the options be used to a bear spread? Construct a table and a diagram that shows the profit and payoff.
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