The price of a share is 40. The price of a one-year European put option on the share with a strike price of 30 is quoted as 7 and the price of a one-year European call option on the share with a strike price of 50 is quoted as 5. Suppose an investor buys 100 shares, shorts 200 call options and buys 200 put options. Which of the following is true?

1. This overall position leads to increasing profits as the share price falls below 30
2. This overall position leads to increasing losses as the share price falls below 30
3. This overall position leads to increasing profits as the share price increases above 50
4. This overall position leads to a profit when the share price is 30