Suppose you build an option portfolio by placing two separate orders. First, you purchase a call...

Suppose you build an option portfolio by placing two separate orders. First, you purchase a call contract on Stock A with a striking price of $120 for a premium of $5 per share. Second, you write two put contracts on Stock B with a striking price of $80 for a premium of $4 per share. You hold the options until the expiration date, when Stock A sells for $123 per share and Stock B sells for $78 per share. What is the option portfolio’s total profit or loss?

		$400 loss
		$200 loss
		$0
		$200 profit
		$400 profit

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Answer : $ 200 Profit

jeff jeffy answered 1 year ago

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