Question
A long straddle is an options trading strategy where an investor simultaneously buys a call option and a put option at the same strike price
A long straddle is an options trading strategy where an investor simultaneously buys a call option and a put option at the same strike price and expiration date for the same underlying asset. This is a bullish and bearish strategy at the same time.
You are interested in investing in a Long Option Straddle in ACME Stock.
You have the following data:
Current Stock Price = $75.00
Dual Strike Price = $71.00
Call Option Premium = $3
Put Option Premium = $1.55
Which of the following statements is most accurate as it pertains to the Long Straddle.
Looking at prices from $60 to $80 with increments of $1, at which stock price will you incur the largest dollar gain.
At the stock price of $72, you will incur the largest loss.
At the stock price of $63, you will incur the largest loss.
At the stock price of $80, you will incur the largest loss.
At the stock price of $60, you will incur the largest loss.
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