Suppose that both a call option and a put option have been written on a stock with an exercise price of $40. The current stock price is $42, and the call and put premiums are $3 and $0.75, respectively. Calculate the profit to positions of both the short call and the long put with an expiration day stock price of $43.
Suppose that both a call option and a put option have been written on a stock with an exercise
price of $40. The current stock price is $42, and the call and put premiums are $3 and $0.75,
respectively. Calculate the profit to positions of both the short call and the long put with an expiration day stock price of $43.
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- Could you give further explanation in the meaning of "Min(X-S,0)" in Profit from Call Option equation & "Max(X-S,0)" in Profit from Put Option equation above for who has little basic concept of option and stock?
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