Draw profit diagram of both straddle and strangle spread on the same graph. Carefully label the levels and turning points such as maximum profit, maximum loss, and break-even prices on the graph.

The current price of a non-dividend paying stock is $30/share. (Ignore time value of money) The following table shows call and put option premiums for three-month European of various exercise prices: Exercise Price 25 30 35 Call Premium 8.92 5.60 3.28 Put Premium 0.70 2.14 5.07 A trader interested in speculating on low volatility in the stock price is considering two investment strategies; straddle or strangle. The current price of a non-dividend paying stock is $30/share. (Ignore time value of money) The following table shows call and put option premiums for three-month European of various exercise prices: Exercise Price 25 30 35 Call Premium 8.92 5.60 3.28 Put Premium 0.70 2.14 5.07 A trader interested in speculating on low volatility in the stock price is considering two investment strategies; straddle or strangle