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IBM shares currently sell for $154. Some of its 3-month European options, at varying strike prices, currently sell for the following premiums. Description Maturity Strike
IBM shares currently sell for $154. Some of its 3-month European options, at varying strike prices, currently sell for the following premiums.
Description | Maturity | Strike | Premium |
IBM 135 call | 3 months | 135 | 18.65 |
IBM 155 call | 3 months | 155 | 4.10 |
IBM 170 call | 3 months | 170 | 0.44 |
IBM 135 put | 3 months | 135 | 1.38 |
IBM 155 put | 3 months | 155 | 6.60 |
IBM 170 put | 3 months | 170 | 18.74 |
How would you set up a reverse straddle such that the profit would be as summarized in the graph below?
Group of answer choices
Long 155 call, long 155 put
Long 155 call, short 170 put
Long 155 put, short 170 put
Short 155 call, short 155 put
Long 135 call, short 155 call, long 170 call
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