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Stock price is $150. You see an at-the-money call option trading at $15, and at-the-money put trading at $5. The options have the same expiration
Stock price is $150. You see an at-the-money call option trading at $15, and at-the-money put trading at $5. The options have the same expiration date. Draw a diagram for the payoff, and a diagram for the profit (on the same graph) if you buy a straddle. Calculate and mark carefully the two breakeven points.
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