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Suppose a call option with a strike price of $40 costs $1.4. Suppose a put option with a strike price of $40 also costs $1.4.
Suppose a call option with a strike price of $40 costs $1.4. Suppose a put option with a strike price of $40 also costs $1.4. You decide to enter a strap (\/), which has a slope of negative 1 to the left of the kink point and positive 2 to the right of the kink point. What is the profit of the strategy if the stock price is $36 at expiration?
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