HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
sorry, but your analysis is slightly wrong
this statement-"If you short the call, you are hoping it makes less than 20 and if you short the Put, you are hoping it makes more than 20." is not consistent with your prebious statement because shorting these options takes in the $2 premium, so it is more accurate to say- "If you short the call, you are hoping it makes less than 22 and if you short the Put, you are hoping it makes more than 18."
if you short the call and it makes $20, you win. if you long the call and it makes $20, you lose. therefore, if you short the call and it makes $22, you break even, just as if you long the call and it makes $22 you also break even.
it seems you are mixing break even and profit.
what good does it do to hold 10,000 of both a call and put? {nm} Dec 13, 12:26
Well...as you know...a Call is betting that a movie will earn MORE than the strike price...a Put is just the opposite... Dec 13, 12:54
That is true... Dec 13, 15:51
Here is my .02 I will use a fictional MOVIE with a strike of 20 which means Dec 15, 09:16
NB....in the last sentence replace "delists" with "Opens" (Terminology !) {nm} Dec 15, 09:45
sorry, but your analysis is slightly wrong Dec 15, 10:17
prebious = previous {nm} Dec 15, 10:17
