You believe that the certain stock will experience an extreme price movement, either up or down, after releasing earnings The stock is currently trading at 60 and you decide to establish a long straddle with a strike price of 60. The call has a premium of 2.61 and the put has a premium of 2.17 for May 2022 delivery. If the stock price moves to 50 following the earnings release, what is your profit/loss on the strategy?

profit 3.22

loss 2.78

loss 1.78

profit 5.22