****Please Do in EXCEL****

5) Strap - Graphical

Draw the net profit diagrams for the put and call positions and for the entire strap trade using the following attributes

• Put: Strike = $30, Premium = ?
• Call: Strike = $30, Premium = $2.00

Since the put and call have the same strike price, you can use put-call parity from Chapter 11 to obtain the put premium.

Assume:

What does it cost to put on this trade? (If you get paid, that's a negative cost).