You write a call option with X 5 $50 and buy a call with X 5 $60. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9.
Draw the payoff graph for this strategy at the option expiration date.
Draw the profit graph for this strategy.
What is the break-even point for this strategy? Is the investor bullish or bearish on the stock?
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