1. What are three ways to terminate an option position?
2. You have been tracking a stock and have decided that it would be profitable to use an option strategy to speculate on the stock. You decide to trade the following strategy:
Sell one $5 strike call for $6.00
Buy two $85 strike calls for $2.00 each
What is the maximum gain from the strategy?
What is the maximum loss from this strategy?
What is the breakeven from this strategy?