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A trader conducts a trading strategy by selling a call option with a strike price of $50 for $3 and selling a put option with
A trader conducts a trading strategy by selling a call option with a strike price of $50 for $3 and selling a put option with a strike price of $40 for $4. Please draw a profit diagram of this strategy and identify the maximum gain, maximum loss, and break-even point. Hint: Write down a profit analysis matrix to help you draw the payoff lines.
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