In: Finance
You have a long call and a long put at exercise prices of $40. Also, you have a short call and a shot put at the exercise price of $45. If all options are properly priced, what is the cost of this combined position?
Can be positive, zero, or negative
Zero
Positive
Negative
The answer is positive
Explination:
if i have longcall and long put at excercise price of $40. And also i have a shot put at the excersice price of $45
If all the optiins are properly priced
Then the cost of the combined positiin will be Positive.