Diagram protective put strategy-collar option strategy

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Reference no: EM131585259

Diagram a protective put strategy (Please identify stock prices used, strike prices used, expiration dates used, premiums paid and/or received and any other information needed to properly grade your response)

a. Show the maximum loss and identify that point on the graph.

b. Show the maximum profit and identify that point on the graph.

c. Show the breakeven stock price and identify that point on the graph.

d. Diagram a-c above for a higher exercise price.

e. Explain why a higher exercise price changes the numbers/points for a-c.

f. Diagram a-c above for a lower exercise price.

g. Explain why a lower exercise price changes the numbers/points for a-c.

h. Explain a protective put, when you would want to use it and why. (Answer must be 25 words minimum to get credit.

i. Explain how and why a protective put is like buying insurance.

2. Explain in detail a collar option strategy. (Answer must be 100 words minimum to get credit.

3. Explain in detail a straddle option strategy. (Answer must be 100 words minimum to get credit.

Reference no: EM131585259

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