You are an ultra high networth investement advisor working with Morgan Stanley. One of your client, is worried about how short$-$term market fluctuations over the next week might impact his long equity position in Nvidia $($NVDA$).$ Although the client is concerned about short$-$term downside price movements with the upcoming earnings, he wants to remain invested in NVDA because he remains positive about NVDA's position in AI$.$ As a consequence, he has asked you to recommend an option strategy that will keep him invested in NVDA while protecting against a short$-$term price decline. To do your job, you ask one of your interns $($a fresh graduate from Drake University who did a course on Portfolio Analytics$)$ to put together a table of $1-$week call$/$put option premiums$/$deltas

$\backslash$table$[[$Current Stock Price is $$\frac{700}{?}$ share$],[$Exercise Price,Call Price,Call delta,Put Price,Put delta,$],[575,137\mathrm{.}58218,0\mathrm{.}85413,12\mathrm{.}02956,-0\mathrm{.}14587,],[600,118\mathrm{.}32709,0\mathrm{.}80225,17\mathrm{.}75044,-0\mathrm{.}19775,],[625,100\mathrm{.}69162,0\mathrm{.}74327,25\mathrm{.}09095,-0\mathrm{.}25673,],[650,84\mathrm{.}78594,0\mathrm{.}67900,34\mathrm{.}16124,-0\mathrm{.}32100,],[675,70\mathrm{.}65771,0\mathrm{.}61159,45\mathrm{.}00898,-0\mathrm{.}38841,],[700,58\mathrm{.}29408,0\mathrm{.}54325,57\mathrm{.}62132,-0\mathrm{.}45675,],[725,47\mathrm{.}62925,0\mathrm{.}47605,71\mathrm{.}93247,-0\mathrm{.}52395,],[750,38\mathrm{.}55541,0\mathrm{.}41175,87\mathrm{.}83460,-0\mathrm{.}58825,],[775,30\mathrm{.}93517,0\mathrm{.}35172,105\mathrm{.}19034,-0\mathrm{.}64828,],[800,24\mathrm{.}61376,0\mathrm{.}29691,123\mathrm{.}84490,-0\mathrm{.}70309,],[825,19\mathrm{.}42981,0\mathrm{.}24786,143\mathrm{.}63692,-0\mathrm{.}75214,]]$

Armed with the above option information, you talk to one your star NVAD analyst who tells you that NVDA shares will experience a large price move $($in either direction$)$ as soon the quarterly earnings are released.

a$)$ What option strategy $($e$.$g$.$ covered call, protective put, straddle etc.$)$ would you most likely to recommend to your client to take advantage of your star analysts recommendation and why? Use the accompanying spreadsheet $($assuming that $1$ option contract is written on $1$ share$)$ to

a$.$ Find the value of your recommended strategy

b$.$ The breakeven $($stock price$)$ of this strategy.

b$)$ How would your answer in a$)$ change if the client to start with has a short position in NVDA and wants to continue shorting NVDA because of the believe that NVDA is overpriced?

c$)$ How would your answer in a$)$ change if the client to start with has NO position in NVDA?

d$)$ Suppose you have another client who does NOT have any position $17$ NVDA. Suppose further that a portfolio manager $($i$.$e a competitor from Goldmans Sachs with whom your client also does business with$)$ tells your client that Goldmans can construct for the client a very innovative a NO$-$LOSE proposition option strategy. More precisely, in this strategy, the client only has to pay $$150$ premium to have the ability to choose between a $$700$ call and $$700$ put in $1$ week upon the expiry of the options. The client reaches out to you to get your opinion on this strategy. What would your recommendation be based on the option data your intern had generated for you?