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You are an analyst that specializes in covering the futures markets in lumber. The lumber futures are currently trading at $30 per 1,000 board feet

You are an analyst that specializes in covering the futures markets in lumber. The lumber futures are currently trading at $30 per 1,000 board feet (lumber futures are priced in units of board foot). Your forecast models indicate that lumber prices will have higher than expected volatility in the next few months. Which of the following derivatives strategies would you recommend to a client based on your forecast?

Buy a call and sell a put option, both with a strike price of $30.

Buy a call and a put option, both with a strike price of $30.

Sell a call and a put option, both with a strike price of $30.

Sell a call and buy a put option, both with a strike price of $50.

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