Advantages and disadvantages of using bid-ask midpoints

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Provide profit diagrams for each strategy and index using the spreadsheet OptionStrategyAnalyzer] De.xism. Let Exhibits 1 and 2 correspond to the first strategy and Exhibits 3 and 4 correspond to the second strategy. These exhibits should contain basic information such as the name of the strategy and index, the maximum profit and maximum loss, and breakeven points. For consistency in these diagrams (and elsewhere throughout this case), use the average of the last bid and ask prices for a given option as the price for that option. Discuss the advantages and disadvantages of using bid-ask midpoints versus bids, asks, or transaction prices.

Reference no: EM133067700

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