Question
Suppose XYZ stock is trading at $40 per share. An options trader enters a long straddle by buying a JUL 40 put for $200 and
Suppose XYZ stock is trading at $40 per share. An options trader enters a long straddle by buying a JUL 40 put for $200 and a JUL 40 call for $200. a) How much is the total investment the trader put into the straddle?b) Whats maximum loss the trader may have?c) If the stock in July trades at $30, whats the profit on this trade?
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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
