Sajal Believes that increase in the stock price likely as its decrease

You are required to

a)State the strategy

b)Calculate maximum profit , maximum loss, and BEP under the strategy and draw pay off diagram?

Mr Sajal Verma has been investing in the stock market for the last 20 years and is popularly known as Tejas" due to his stock picking skills. He is also using derivatives especially options in managing his portfolio. Now he feels that stock price of Optica Ltd. will be volatile in near future. However he is not certain about the direction of stock price. He would like to utilize this opportunity by adopting a suitable strategy using options The current market price of Optica's stock is Rs 155 and the following are the 3-month options available on the stocks of Optica Ltd. Call Option Strike Price Premium (Rs.) (Rs.) 150 2.25 Put Option Strike Price Premium (Rs.) (Rs.) 150 1.20 155 1.45 1.75 155 160 2.10 160 1.35