Chapter 06 · Section 6.1

Maximum Potential Gains

Back to the September 40-45-50 butterfly. Of the choices listed below, your maximum potential gain at expiration is when:

• a) the underlying is at 45.
  No. Your maximum potential loss is when the underlying is at 45.
  b) the underlying is at 49 7/8.
  c) the underlying is at 40.
  d) the underlying is at 40 1/8.