SIE practice questionhardSpreads
A trader simultaneously buys a March 50 call at $7 and sells a March 55 call at $3. What's the maximum profit per share?
- A$1✓ Correct answer
- B$3
- C$5
- D$2
Explanation
Why A — $1
This is a bull call debit spread. The maximum profit per share is the strike-price difference minus the net debit paid: ($55 - $50) - ($7 - $3) = $5 - $4 = $1.
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