1. You purchase one Microsoft November $280 put contract (X = $280) for a premium of $8 (P₀ = $8).

1. What is your maximum possible payout at expiration?
2. What is your maximum possible profit at expiration?

1. Assume that I decide to buy an April $50 call for $6.50 (first, determine which is X and which is C₀). The stock is currently trading for $54.
2. Fill in the following table.
3. Diagram the value of call & the net profit/loss.

Initial Cash Flow	Stock Price at Expiration	Value of Call at Expiration	Net Profit/Loss
	$35
	$45
	$50
	$55
	$60
	$65
	$75

3. Assume each call option is for 100 shares here.

I decide to write a May $65 call option for $3 AND simultaneously buy 100 shares of the underlying stock. The stock is currently trading for $70. Fill in the following table:

Initial Cash Flow	Stock Price at Expiration	Value of $65 Call at Expiration	Value of 100 Shares of Stock	Net Profit/Loss
	$62.50
	$65
	$67.50
	$70
	$72.50
	$75
	$77.50