Question

Draw the shapes of each of the following: (12 points)

      Short Call

      Long Put

     Short Strangle                                                                    

     Long Straddle

      Long Call                                                                          

     Bear Spread

   Short Straddle                                                                      

      Short Put

     Bull Spread                                                                        

   Long Butterfly

   Short Butterfly                                                                     

    Long Strangle

Answer 1

Sol" Long Call Purchased 3 month call option [c+] on the stock at a strike price of 350 for a ser premium of 18. Profit Max loss = 18 Loss Max Profit = Unlimited 3So / 368 = BEP Stock Price at Expiration [ST] (18) Note :- BEP = Break Even Price Short Call Sold 3 month call option [c- at strike price (E) = 1000 for a premium of 75. Profit! Max Profit=75 Max loss Unlimited "I loss 75 BEP = lo #S ST 1000

put option at E = 10300 Long Put [pt] Purchased a one month and premium 180. Profit/ Loss A -> ST NE: 012o 10300 (180) Short put sold a 3 month Price of 300 for Profit Loss put option [ ] at strike premium of 45. 45 + BEP-2SS o 300 IST

Bear Put Spread Buy It wat in The Money] put at Strike Price = 8100 Sell I OTM [Out of The Money] put. at Strike Price = 7900 Current Market Price = 8100 Premium Paid = 60 Premium Received - 20 Net Premium Paid = 40 Profit q BEP=8060 7900 Profit Potential a = United 160 hoss Potential il limited J (-40) 8100 Underlying Stock Higher Loss / Tower Price w

Bear Call spread Profit BEP=9350 9300 limited AN Limited Loss = -50 que tock Underlying Stock loss t Higher Tower Current Spot Price = 9300 Sell I ATM (At The Money] call of Strike Price = 9300 Premium received = 105 Buy 1 OTM [out of the Money] Call of Strike Price Premium paid = 55 Net Premium vreceived - so. [105-55] I OT

Bull call spread Buy I ITM Call (In The Money at Strike Price = 40 Premium Paid = 300 Sell I OTM Call at strike Price = 45 Premium Received = 100 Current Price = 42 Net Premium paid – 200 Profit 300 4 out 7 ST (200) ft Loss

Bull put spread Buy I OTM Put at Strike Price = 40 Premium paid = 100 Sell I ITM Put at Strike Price = 45 Premium received - 300 Net premium received - 200 Current Price = 43 Profit 200 t - 4 943 4S ST -300+ c V Loss

Short Strangle Sell 10tm call sell I OTM Put. Max Profit - Premium received BER BEP Unlimited loss V loss. upside BEP = Short Call Strike + Premium received Downside BEP = Short put Strike - Premium received Buy 10TM Call Long Strangle Buy 10ти Put upside BEP = Long Call Strike + Premium paid Downside BEP = Long Put Strike Premium paid

Profit Unlimited profit 220€ IST V Maximum loss Premium paid BEP Loss Short Strangle Straddle Sell I Call 7 at same sell I put J E Eupside BEP = E + Premium 7 Downside BEP = 7 E- Premium Maximum Poofit = Premium received. 2 BEP 7ST Stuke Price ve Unlimited loss lon

Long Straddle Buy I Call 7 at same E Buy I put J Profit BEP BEP O Maximum 7ST loss - Premium mium Paid upside BEP = Et Premium Downside BEP = E- Premium less V Long Butterfly Long I Call at 30 long I Call at so Short 2 Calls at Yo. Soo ABEL 308 so 30 AST (300) 7 loss

Short Butterfly Shout I put at 30 Short I Put at so long 2 Puts at 40 yoo of 30 q no R so ->ST "BEP (600) I loss