# What is the price of a european call option with properties as described in the table

Otherwise, there is a certain profit to be had by creating either a long box-spread if the profit is positive or a short box-spread if the profit is negative. The subtraction done one way corresponds to a long-box spread; done the other way it yields a short box-spread. This page was last edited on 8 Marchat We can obtain a third view of the long box-spread by reading the table diagonally. To what extent are the various instruments introduced above traded on exchanges?

The subtraction done one way corresponds to a long-box spread; done the other way it yields a short box-spread. A similar trading strategy specific to futures trading is also known as a box or double butterfly spread. All articles with dead external links Articles with dead external links from November Articles with permanently dead external links.

A similar trading strategy specific to futures trading is also known as a box or double butterfly spread. Options finance Derivatives finance Stock market. However, market forces tend to close any arbitrage windows which might open; hence the present value of B is usually insufficiently different from zero for transaction costs to be covered. The subtraction done one way corresponds to a long-box spread; done the other way it yields a short box-spread.

The box-spread usually combines two pairs of options; its name derives from the fact that the prices for these options form a rectangular box in two columns of a quotation. Guts constituted only about 0. From Wikipedia, the free encyclopedia.

From Wikipedia, the free encyclopedia. We can obtain a third view of the long box-spread by reading the table diagonally. The pay-off for the long box-spread will be the difference between the two strike prices, and the profit will be the amount by which the discounted payoff exceeds the net premium.

For parity, the profit should be zero. The long box-spread comprises four options, on the same underlying asset with the same terminal date. For example, a bull spread constructed from calls e.