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What is the spread profit-to-loss ratio

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Reference no: EM133111379

Look at the following information.

Security

Qty

Bid

Ask

Invesco QQQ Trust ETF

 

$399.81

$399.63

QQQ 14 JAN 2022 410 CALL

20

$0.07

$0.10

QQQ 14 JAN 2022 415 CALL

20

$0.01

$0.04

QQQ 14 JAN 2022 390 PUT

20

$0.35

$0.36

QQQ 14 JAN 2022 385 PUT

20

$0.17

$0.19

a. If you decide to enter into iron condor spread, how would it be structured, and what would the potential profit or loss be?

b. What is the spread's profit-to-loss ratio?

c. How much margin (buying power) does this position require?

d. What are the breakeven points?

e. If the QQQ monthly historic volatility is 2.65%, what is the expected return of this spread?

Reference no: EM133111379

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