Average to trade out of current range of price lot

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Reference no: EM131887765

Mr. Dapang expects the tracking stock on Dow Jones Industrial Average to trade out of the current range of price a lot, but he is not sure about which direction the will go. Based on his expectation, he believes a profitable trading oppourtunity is to initiate a short butterfly spread strategy using call options on DIA. The premium of the one month calls with strike price of $88, $92, and $96 are $4.2, $2, and $0.5, respectively. Mr. danpang wants a butterfly spread using a total of 2 long contracts and 2 short contracts with each contract for 100 shares. The breakeven prices from the buttery at expiration are ____ and ______.

Reference no: EM131887765

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