48. Payoff and profit for writer and buyer - call option.

48. Payoff and profit for writer and buyer - call option. -...

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EXERCISE PRICE: $50 PRICE OF CALL: $5 PAYOFF S MAX(S-E,0) PROFIT 35 0 -5 38 0 -5 40 0 -5 43 0 -5 46 0 -5 49 0 -5 50 0 -5 51 1 -4 53 3 -2 55 5 0 58 8 3 60 10 5 65 15 10 70 20 15 PAYOFF S MIN(E-S,0) PROFIT 35 0 5 38 0 5 40 0 5 43 0 5 46 0 5 49 0 5 50 0 5 51 -1 4 53 -3 2 55 -5 0 58 -8 -3 60 -10 -5 65 -15 -10 70 -20 -15 Payoff of call's holder = MAX(S-E,0) 0 5 10 15 20 25 20 30 40 50 60 70 80 Stock price ($) Payoff ($) Profit of call's holder = MAX(S-E,0)-$5 -10 -5 0 5 10 15 20 20 30 40 50 60 70 80
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Unformatted text preview: Stock price ($) Profit ($) Payoff of call's writer = MIN(E-S,0)-25-20-15-10-5 20 30 40 50 60 70 80 Stock price ($) Profit of call's writer = MIN(E-S,0)+$5-20-15-10-5 5 10 20 30 40 50 60 70 80 Stock price ($)...
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