How can you be sure that the profit of the box strategy is positive?
So, X2 – X1 – c1 + c2 – p2 + p1 is positive.
If the options are fairly priced, the return will be the risk-free rate.
How can you be sure that the profit of the box strategy is positive?
So, X2 – X1 – c1 + c2 – p2 + p1 is positive.
If the options are fairly priced, the return will be the risk-free rate.