On the expiration date you cash out your portfolio

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Reference no: EM131814757

Assume you are buying stock in Exxon. You buy a share of stock at 220, and a put option at 230 for 12.You sell a call option at 210 for 9. You hold your portfolio until the expiration date. On the expiration date you cash out your portfolio.

Graph the profits of your strategy as the price of Exxon stock at the expiration date goes from 200 to 230.

Reference no: EM131814757

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