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VI. (15 points) Trading Strategy with Options A call with a strike price of $100 costs $10. A put with a strike price of 90
VI. (15 points) Trading Strategy with Options A call with a strike price of $100 costs $10. A put with a strike price of 90 and the same maturity costs $5. Both will mature in three months. A trader buys both the call and the put simultaneously. 1. Present the profit/loss at maturity from this strategy in the following table. 2. Draw a diagram to show the relationship between total net payoff with stock price at maturity. 3. For what range of stock prices would the strategy lead to a profit? Explain when the trader should use this strategy
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