a. A bull spread is a strategy that is used by traders in options trading to gain from small rise in prices. It involves buying at a lower strike price and selling at a higher strike price.

The outcome is:

Stock price >= $35 will give a payoff of 0 and a profit of 3

$30≤ Stock price <$35 will give payoff of (stock price - $35) and a profit of (stock price - 32)

Stock price <$30 with payoff of -5 and a profit of -2

b. A bear spread is when a trader buys a contract at a higher strike price and sells at a lower strike price. This is used to maximise profit as price of the stock declines.

The outcome is:

Stock price >= $35 will give a payoff of 0 and a profit of -3

$30≤ Stock price <$35 will give payoff of ($35 -stock price) and a profit of ($32 - stock price)

Stock price <$30 with payoff of 5 and a profit of 2

4 0

3 years ago

Fill in the blanks:

marysya [2.9K]

a) Ronaldo is a  famous footballer.

b) That was an  important day in history.

c) He can play the  guitar well.

I hope it's help you...

Thanks♥♥

6 0

3 years ago