Financial Risk Manager Part 1
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An investor sells a January 2014 call on the stock of XYZ Limited with a strike price of USD 50 for USD 10, and buys a January 2014 call on the same underlying stock with a strike price of USD 60 for USD 2. What is the name of this strategy, and what is the maximum profit and loss the investor could incur at expiration?
An investor sells a January 2014 call on the stock of XYZ Limited with a strike price of USD 50 for USD 10, and buys a January 2014 call on the same underlying stock with a strike price of USD 60 for USD 2. What is the name of this strategy, and what is the maximum profit and loss the investor could incur at expiration?
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Bear spread | USD 8 | USD 2
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