The condor is a specialised position that involves taking positions in options on the same underlying...

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The condor is a specialised position that involves taking positions in options on the same underlying asset and with the same expiration date. The profit diagram for a long condor position is illustrated below. Profit/Loss $85 $85 $90 $90 $95 $95 $90 Class Exercise Price Option Premium Call $21.0000 Put $0.2727 Call $18.0000 Put $1.8182 Call $15.0000 Put $3.3636 Call $12.0000 Put $4.9091 Call Put Call $110 Put $110 Call $115 Notes: Discount rate = 10% p.a. $100 $100 $95 $105 $105 Using the graph above and the table below that lists various options positions you can take, answer the following questions: $100 $9.4000 $6.8545 $6.0000 $8.0000 $3.0000 $105 Expiration Date 1 year 1 year 1 year 1 year Stock price 1 year 0.5 year 1 year 1 year 1 year 1 year 1 year 1 year 1 year (a) Determine the current stock price (b) Design two strategies you need to undertake in order to execute the condor with the profit diagram described in the graph above. i. Outline the positions for the two strategies ii. Calculate the cost of the initial condor position for the two strategies iii. Write down the profit equation for the two strategies iv. Determine the break-even points for the two strategies v. Determine the maximum and minimum profit for the two strategies The condor is a specialised position that involves taking positions in options on the same underlying asset and with the same expiration date. The profit diagram for a long condor position is illustrated below. Profit/Loss $85 $85 $90 $90 $95 $95 $90 Class Exercise Price Option Premium Call $21.0000 Put $0.2727 Call $18.0000 Put $1.8182 Call $15.0000 Put $3.3636 Call $12.0000 Put $4.9091 Call Put Call $110 Put $110 Call $115 Notes: Discount rate = 10% p.a. $100 $100 $95 $105 $105 Using the graph above and the table below that lists various options positions you can take, answer the following questions: $100 $9.4000 $6.8545 $6.0000 $8.0000 $3.0000 $105 Expiration Date 1 year 1 year 1 year 1 year Stock price 1 year 0.5 year 1 year 1 year 1 year 1 year 1 year 1 year 1 year (a) Determine the current stock price (b) Design two strategies you need to undertake in order to execute the condor with the profit diagram described in the graph above. i. Outline the positions for the two strategies ii. Calculate the cost of the initial condor position for the two strategies iii. Write down the profit equation for the two strategies iv. Determine the break-even points for the two strategies v. Determine the maximum and minimum profit for the two strategies

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In finance and accounting condor spread is a strategy that do not direct options strategies limiting both gain and losses while trying to venture for profit from either low or high volatility Based on ... View the full answer