In cylinder or tunnel option, the correct option is a. If the spot rate is lower than the lower strike rate then buyer has to pay lower spot...

A cylinder is an option strategy which is also called a
vertical spread. It allows traders to reduce the loss they make if the price of the
underlying moves in the opposite direction to what was expected at a lower cost. If the
price of the underlying moves as the trader expects it to a profit can also be
made.

The type of cylinder that is adopted can be bullish
or bearish depending on which way the trader is expecting the price of the underlying to
move. A bullish cylinder would involve buying a call with a lower strike price while
selling a put with a higher strike price. The premium received when the put is sold
reduces the cost of buying the call. Here, the profit is capped at the difference at
expiry between the price of the underlying and the strike price of the call that has
been bought. If the price of the underlying decreases instead of increasing the maximum
loss is the difference between the price of the underlying and the strike price of the
put that has been sold. The reverse holds for a bearish
cylinder.

Depending on the type of cylinder that has been
created options B and D are correct. If the spot rate is lower than the lower strike
rate the buyer has to only pay the lower strike rate and if the spot rate is higher than
the higher strike rate then the buyer has to only pay the higher strike
rate.