Question: Using calls on AAPL, you can construct a short butterfly on June 1, 2018 by buying two AAPL180608C00190000 calls at $1.90 premium and simultaneously selling

Using calls on AAPL, you can construct a short butterfly on June 1, 2018 by buying two AAPL180608C00190000 calls at $1.90 premium and simultaneously selling one AAPL180608C00185000 call at $5.65 premium and another AAPL180608C00195000 call at $0.33 premium. This short butterfly gives the trader a net credit to enter the position and will expire in 5 trading days on June 8, 2018. Discuss the payoffs of this short butterfly at its expiration and the range of profit/loss. (Hint: If on June 8, 2018, AAPL closes at $181, $182, $183, ...,$189, $190, $191, ..., $197, $198, $199, respectively, what will be the profit/loss of this short-butterfly position for each AAPL price?)

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