Chapter 06 · Section 6.1
Premiums-1
PUTS
100 .60/share
110 3.70/share
120 10.80/share
Suppose that you wanted to construct a short butterfly spread using these options. Would you receive a net premium or pay a net premium for the spread?
a) pay a net premium
b) receive a net premium
Compare the price of the options you sell to the price of the option you buy.