Which one of the following is a bear call spread? buying a $30 call and selling
ID: 2617788 • Letter: W
Question
Which one of the following is a bear call spread?
buying a $30 call and selling a $35 put
selling a $30 call and buying a $35 put
buying a $30 call and selling a $35 call on the same stock
buying a $30 call and selling a $25 call on the same stock
selling a $30 call and buying a $30 call on the same stock
A.buying a $30 call and selling a $35 put
B.selling a $30 call and buying a $35 put
C.buying a $30 call and selling a $35 call on the same stock
D.buying a $30 call and selling a $25 call on the same stock
E.selling a $30 call and buying a $30 call on the same stock
Explanation / Answer
Bear call spread involves purchasing a call option with strike price K1 and selling a call option with strike price K2, such that K1 > K2 with the underlying asset and option maturity being same.
Therefore, the only option satisfying the aforementioned condition is (D).
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