The market price of ABC stock has been very volatile and you think this volatility will continue for a few weeks. Thus, you decide to purchase a one-month call option contract on ABC stock with a strike price of $25 and a one-month put option on ABC stock with a strike price of $25. Each option permits you to buy or sell a round lot of 100 shares. Ignoring transaction costs, what will be your total payoff of your portfolio if the market stock price is $24.60 on the day the options expire? The market price of ABC stock has been very volatile and you think this volatility will continue for a few weeks. Thus, you decide to purchase a one-month call option contract on ABC stock with a strike price of $25 and a one-month put option on ABC stock with a strike price of $25. Each option permits you to buy or sell a round lot of 100 shares. Ignoring transaction costs, what will be your total payoff of your portfolio if the market stock price is $24.60 on the day the options expire?

$0

$-180

$40

-$40

$180