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A speculator writes (or sells) a call option with a strike price of $85 and a put option with a strike price of $65 on
A speculator writes (or sells) a call option with a strike price of $85 and a put option with a strike price of $65 on one share of X Inc. common stock. Both options are European and expire a year from now. The call premium is $7 whereas the put premium is $5. For what values of the year end stock price will the speculator generate a positive profit? (You should draw the Options diagram combined with the options mentioned in the question. Show clearly the net profit margin line)
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