Sketch the payoff that the trader receives

Reference no: EM132179326

Question -

1. A trader puts together a "diagonal spread", consisting of a call option with strike price $30 maturing in 12 months and writing a call option with strike price $35 maturing in 6 months. Sketch the payoff that the trader receives in 6 months time if she sells her 12 month call then.

2. Now sketch the payoff if the trader had taken a long 12 month call with strike $35 coupled with writing a 6 month call with strike price $30.

Reference no: EM132179326

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