In order to speculate in the market, you are considering the following strategies: Strategy...
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Finance
In order to speculate in the market, you are considering the following strategies:
Strategy 1: Long Call option with a strike price of 28500, short put option with a strike price of 27000 Strategy 2: Long Call option with a strike price of 27000, short call option with a strike price of 30000 Strategy 3: Long Call and Long Put with a strike price of 28500
All of the options used are with 6-month maturity. Below is the relevant call and put premiums:
(Leave 2 d.p. for dollar terms answer)
Strike
Call premium
Put premium
27000
2112.39
1093.31
28500
1363.65
1843.82
30000
831.38
2810.8
What is the expected profit of strategy 1,2 and 3 respectively?
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