Construct a bear money spread using the October 165 and 170 calls. Hold the position until the options expire. Determine the profits and graph the results. Identify the breakeven stock price at expiration and the maximum and minimum profits. Discuss any special considerations associated with this strategy.
Repeat problem 4, but close the position on September 20. Use the spreadsheet to find the profits for the possible stock prices on September 20. Generate a graph and use it to identify the approximate breakeven stock price.
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Calls Puts
|
|
Strike
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Jul
|
Aug
|
Oct
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Jul
|
Aug
|
Oct
|
|
160
|
6.00
|
8.10
|
11.10
|
0.75
|
2.75
|
4.50
|
|
165
|
2.70
|
5.25
|
8.10
|
2.40
|
4.75
|
6.75
|
|
170
|
0.80
|
3.25
|
6.00
|
5.75
|
7.50
|
9.00
|