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Determine gain or loss

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In December, you believe that OPK Company, which is currently trading at $125 per share, will drop to $110 per share or less over the next month or two.  You sell 20 OPK January $128 Calls for a premium of $5.00.  At the same time you buy 20 OPK January $135 Calls at a premium of $1.25 (sell January calls with a strike of $128 and $5.00 premium and buy 20 January Calls with a strike of $135 and premium of $1.25). Determine your gain or loss if:

  1. the stock price decreases to $110 per share at expiration
  2. the stock price decreases to $100 per share at expiration
  3. the stock price increases to $127 per share at expiration
  4. the stock price increases to $150 per share at expiration
  5. the stock price increases to $133 per share at expiration
  6. the stock price decreases to $131.75 per share at expiration

Reference no: EM133111785

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