... JWBK147-Smith May 8, 2008 9 :56 Char Count=92 OPTION STRATEGIES7Price of Underlying InstrumentProfit643 5 21−1−2−304041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 7.1 Buy ... initial investment For example, if you buy an IBM option for 5 and sell it for 71/2,foraprofit of 21/2, your return on investment is 50 percent (21/2÷ 5 = 0 .50 , or 50 percent). Annualizing ... Strategy 81FIGURE 6.3 October CallsWe would pay $11 ,55 5 for the 100 shares and receive $2 ,50 0 for ourshort call for a net investment of $9, 055 . However, the position is not ac-ceptable. We wanted...