You are a portfolio manager who uses options positions tocustomize the risk profile of your clients. In each case, whatstrategy is best given your client$$s objective?

Scenario A

$1.$ Performance to date: Up $16\%.$

$2.$ Client objective: Earn at least $15\%.$

$3.$ Your forecast: Good chance of major market movements,either up or down, between now and end of year.

i$.$ Long straddle.

ii$.$ Long bullish spread.

iii. Shortstraddle.Scenario B

$1.$ Performance to date: Up $16\%.$

$2.$ Client objective: Earn at least $15\%.$

$3.$ Your forecast: Good chance of a major market decline between now and end of year.