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Suppose the current stock price is $50. You write a strangle by shorting a put with a strike price of $48 and shorting a call
Suppose the current stock price is $50. You write a strangle by shorting a put with a strike price of $48 and shorting a call with a strike price of $52. Your colleague tells you that you have made a poor decision. She says you should have written a straddle with a strike price of $50 because you would have received higher premiums. How would you respond to her statement?
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