Question: Suppose you enter into a put ratio spread where you buy a 45-strike put and sell two 40 strike puts. If you delta-hedge this position,

Suppose you enter into a put ratio spread where you buy a 45-strike put and sell two 40 strike puts. If you delta-hedge this position, what investment is required? What is your overnight profit if the stock tomorrow is $39? What if the stock is $40.50?

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The 45strike put has a premium of 50824 and a delta of 07185 and the 40strike put has a premium of 1... View full answer

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