FIN 376: Option Spreads Trading Assignment

Trade the following stock option spreads.  You can either long or short each spread.  Record in Excel what contracts you traded, the prices, whether you bought/sold them, and ultimately whether you are long/short the underlying stock or the stock's volatility.  Also, calculate your max gain, max loss, and breakeven underlying price.  Upload this to dropbox.  We'll close out of the trades after a week or so and record our profit/loss.

Make sure you use a different underlying stock for each spread trade.  Lastly, pay attention to the bid/ask (and the volume of trading) in your options. You generally don't want to trade very illiquid options.

1.  Trade a butterfly spread.

2.  Trade one of the following: bull call, bear call, bull put, or bear put spread.

3.  Trade a straddle.

4.  Trade a covered call.

5.  Trade a protective put.

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