A Trader Creates a Long Butterfly Spread from Options with Strike

question 19

Multiple Choice

A trader creates a long butterfly spread from options with strike prices $60,$65,and $70 by trading a total of 400 options.The options are worth $11,$14,and $18.What is the maximum net gain (after the cost of the options is taken into account) ?

• A) $100
• B) $200
• C) $300
• D) $400

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Definitions:

Transcendence

The act of going beyond ordinary limits; surpassing or existing apart from the material experience.

Consciously Engaged

Actively participating or being fully present in an activity or task with deliberate awareness.

Healthy Lifestyle

A way of living that lowers the risk of being seriously ill or dying early, not just the absence of disease. This includes eating a balanced diet, regular physical activity, and managing stress.

Contemplation Stage

A phase in the transtheoretical model of behavioral change during which an individual is aware a problem exists and is seriously thinking about overcoming it but has not yet made a commitment to take action.