Please help thank you PRICES AT CLOSE JANUARY 18, 2013 Underlying Steck Price: 1

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Please help thank you

PRICES AT CLOSE JANUARY 18, 2013 Underlying Steck Price: 194.47 Put Expiration Strike Last Volume Interest Last Volume Interest an 9.15 185 15 10.60 185 1200 185 14.35 190 4.40 190 75 190 90 10.95 195 195 2431 0.76 302 2488 2 1.82 710 3645 706 3.60 104 2047 37 1354 815 5 .75 507 2496 40 280 3.00 3553 10377 1866 5.20 527 2177 6 1142 001 245 11718 070 4090 B862 365 1337 11902 5.00 860 3156 134 6.55 an 885 100 15 645 854 an 550 1785 228 .30 4 114 195 845 13 577 1085 22 3419 10 1248 2966 5.55 637 6199 1.61 1053 5530 2.09 546 967 an 200 370 629 336 1005 375 10 6. 10 20 157 Figure 20.1 Stock options on IB as of January 18, 2013 Source: The Wall Street Journal Online, January 18, 2013. M closing prices

Explanation / Answer

payoff of put=max(K-S,0)
payoff of call=max(S-K,0)
profit=payoff-premium

Call X=190
payoff=max(195-190,0)=5
profit=5-6.75=-1.75

Put X=190
payoff=max(190-195,0)=0
profit=0-3=-3

Call X=195
payoff=max(195-195,0)=0
profit=0-3.65=-3.65

Put X=195
payoff=max(195-195,0)=0
profit=0-5=-5

Call X=200
payoff=max(195-200,0)=0
profit=0-1.61=-1.61

Put X=200
payoff=max(200-195,0)=5
profit=5-8.09=-3.09

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