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What is the maximum potential profit

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Reference no: EM132694297

Suppose you purchase one XYZ August 100 call contract at $6.5 and write one XYZ August 110 call contract at $0.5.

a.) What is the maximum potential profit of your strategy?

b.) If, at expiration, the price of a share of XYZ stock is $105, what would be your profit?

c.) What is the maximum loss you could suffer from your strategy?

d.) What is the lowest stock price at which you can break even?

Reference no: EM132694297

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