Question
State whether you agree or disagree with the following statement. Explain why. A stock price has been quite volatile lately, and the market's expectation is
State whether you agree or disagree with the following statement. Explain why. A stock price has been quite volatile lately, and the market's expectation is that high volatility will continue. You, on the other hand, expect the stock's price volatility to decrease significantly in the next three months. If you are not sure of the direction of the price change, you can speculate on this expectation by selling both call and put options (not just calls or just puts) on the stock as opposed to buying call and put options on the stock.
(Note: You are only considering call and put positions on this stock. You are not considering other ways to profit from your expectation.) (Maximum 3 sentences, maximum 100 words.)
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