{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Bear Spread Using Puts

Bear Spread Using Puts - c1-c2 K1 – K2 c1-c2 Box Spread...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Bear Spread Using Puts Figure 11.4, page 253 K1 K2 Profit ST 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Bear Spread Using Calls Figure 11.5, page 254 K1 K2 Profit ST 2
Image of page 2
Bear Spread Using Calls Note K1 < K2 so c1> c2 and written spread 3 Today ST < K1 K1<ST <K2 ST > K2 Buy call 2 -c2 - - ST - K2 Sell call 1 +c1 - K1 - ST K1 - ST payoff c1-c2 0 K1 – ST K1 – K2 Total c1-c2 K1 – ST
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: - c1-c2 K1 – K2- c1-c2 Box Spread • A combination of a bull call spread and a bear put spread • If all options are European a box spread is worth the present value of the difference between the strike prices • If they are American this is not necessarily so 4...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern