The stock is launching a new product tomorrow and a trader wishes to exploit this opportunity by holding options. The current stock price is trading at $30. The trader following the stock expects the news to cause the volatility over the next three months to be either 10% or 40%. He believes that there is a 30% chance of the first outcome and a 70% chance of the second outcome.

The trader calculates the call prices for three-month options using 10% and 40% volatility. Then using the weighted-average price (from the two prices), the trader creates the implied volatilities. The output table is in the following:

A Strike price	B Call Price (calculated with 10% Vol)	C Call Price (calculated with 40% Vol)	D Implied Volatility of the Weighted Average Price (of Columns A and B)
24	6.519	6.943	25.53
26	4.358	5.224	23.13
28	2.341	3.765	20.77
30	0.867	2.598	19.80
32	0.195	1.716	20.68
34	0.025	1.087	22.67
36	0.002	0.661	24.67

Would you recommend the trader to use call options or put options or both to exploit the product launch opportunity? Provide the trader with a suggestion and discuss the reasoning behind your suggestion. Discuss the profit/losses he could incur if he follows your suggestion.