Your anticipations about the stock at maturity

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Reference no: EM132038760

You purchase one (1) call option with strike price 50 for $ 9 and write three (3) call options with strike 60 for $ 3.

Draw the payoff and profit table for this strategy at maturity.

When do you break-even (profit=0) at maturity?

What are your anticipations about the stock at maturity (when do you make money)?

Assume that you may purchase calls with strike price 70 for $ 1. How many options would you trade to prevent unbounded losses at maturity? What would be the maximum extent of your losses after the purchase?

Reference no: EM132038760

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