An Apple (AAPL) call option with a strike price of USD 170 can be bought from or sold to Bank of America for USD 10
An Apple (AAPL) call option with a strike price of USD 170 can be
bought from or sold to Bank of America for USD 10. Curiously, an AAPL call with the same maturity but with a strike price of USD 180 can be bought from or sold to Morgan Stanley for UDS 10. If you plan to hold the options to maturity:
a) devise a zero-net-investment arbitrage strategy (you use the premium from selling one option to buy the other) to exploit the pricing anomaly).
b) Draw the payoff diagram for your position at maturity
c) what is the name of your position?