Chapter 25 - Options Strategies
396 Table 25-2

Price at Expiry   Out of the Money At the Money In the Money Long GE
      
$60 Value:
Profit:
+$6,000.00
+$1,960.00
+$6,000.00
+ $1,730.00
+$6,000.00
+$770.00
+$6,000.00
+$2,000.00
397 At the bottom of the page

Short put is exercised (S < $30)
Profit = - 100 ($30 - S) + $1060 = 0
S = $30 - $10.60
S = $19.40
Short call is exercised ($30 < S)
Profit = - 100 (S - $30) - $1060 = 0
S = $30 + $10.60
S = $40.60
398 In Table 25-9 the value and profit labels are ambiguous. The value line is at $0 at $30 where both the put and the call expire worthless. The value line is never positive; the profit line can never be in negative territory throughout the entire range; no one would ever invest in such a strategy.
398 25.4 Strangle

A strangle is similar to a straddle but the exercise price of the call is different from the exercise price of the put.
398 At the bottom of the page

John exercises long put (S < $35)
Profit = 100 ($35 - S) - $360 = 0
S = $35 - $3.60
S = $31.40
John exercises long call ($45 < S)
Profit = 100 (S - $45) - $360 = 0
S = $45 + $3.60
S = $48.60
399 In Table 25-10 the value and profit labels are reversed. The value line is horizontal at $0 between $35 and $45 where both the $35 put and the $45 call expire worthless.
400 In the table above Figure 25-12 the short call is exercised and the breakeven price is calculated as
II = -100 (S-$30) + $770
S = $30 + $7.70
S = $37.70
401 In Table 25-3

Price at Expiry       Bear Spread
         
$35       -$500.00
+$270.00
402 In Table 25-4, in the top cell of the middle column the description should be 10,000 shares at $40 not 40,000 shares at $40