Portfolio minus the amount you paid for the portfolio

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Reference no: EM132070137

Assume today is the last day for exercising your options.

1) You own (are long) a call with an exercise price of 70 and a put at 64.

2) You are short a call at 90, and long a put at 75.

3) Short a call at 85, long a put at 89, and long one share of the stock.

4) Assume you are buying stock in Exxon. You buy a share of stock at 65, and a put option at 60 for 1.85. You sell a call option at 60 for 4.78. 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 50 to 100. Profits equal the amount you receive at the expiration date for cashing out your portfolio minus the amount you paid for the portfolio.

Reference no: EM132070137

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