q17

Question 17. You are a risk manager and use options position to customize the risk profile of your firm that sells oil as the major product. If the cost of oil extraction is fixed, which oil option strategy is best given that your firm's objective is to maximize the chances to earning positive profits and minimize the chances of suffering losses, while they expect the oil prices to decrease or increase by large amount between now and end of the year? F. Protective put Covered call H. Long straddle Short Straddle J. Long bullish spread