Hello, For the black scholes chapter, there is a lot question where the payoff is S1 - 35 if 35<=S1<=45 10. if 45<=S1<=55 65 - S1 if 55<=S1<=65 0. Otherwise The payoff is written in terms of two long and two short call options. What is the best way to tackle these questions to write the payoff ito options? I struggle to see the what options to use. Many thanks in advance.
You can do everything with calls from the left or puts from the right - check out the attached, see if it helps
I'd made a mistake in the "CM2 position diagram tips" pdf with the underlying slope for "Puts from the right" - now corrected
