Question

Long two calls at 115, short a put at 130, short a share of stock.

(Please include a table with at least 50 data points for the graph. Graph for stock prices between 100 and 140.)

Answer 1

payoff from call option = Max( S-X, 0)

Pay off from short Put option = Max( S-X, 0)

X= strike price , S= Spot price

Pay off from portfolio = 2*Payoff from call option + Payoff from short position of Put option

	115	130
Spot price	Call Payoff	Put Payoff	Payoff Of portfolio
100	0	0	0
101	0	0	0
102	0	0	0
103	0	0	0
104	0	0	0
105	0	0	0
106	0	0	0
107	0	0	0
108	0	0	0
109	0	0	0
110	0	0	0
111	0	0	0
112	0	0	0
113	0	0	0
114	0	0	0
115	0	0	0
116	2	0	2
117	4	0	4
118	6	0	6
119	8	0	8
120	10	0	10
121	12	0	12
122	14	0	14
123	16	0	16
124	18	0	18
125	20	0	20
126	22	0	22
127	24	0	24
128	26	0	26
129	28	0	28
130	30	0	30
131	32	1	33
132	34	2	36
133	36	3	39
134	38	4	42
135	40	5	45
136	42	6	48
137	44	7	51
138	46	8	54
139	48	9	57
140	50	10	60