What is meant by a protective put

Reference no: EM131237184

1. What is meant by a protective put? What position in call options is equivalent to a protective put?

2. Explain two ways in which a bear spread can be created.

3. When is it appropriate for an investor to purchase a butterfly spread?

4.Call options on a stock are available with strike prices of $15, $171 2 , and $20, and expiration dates in 3 months. Their prices are $4, $2, and $, respectively. Explain how the options can be used to create a butterfly spread. Construct a table showing how profit varies with stock price for the butterfly spread.

Reference no: EM131237184

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