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You take a speculative position in two options. You sell a call option and you sell a put option on firm ABC. The call option
You take a speculative position in two options. You sell a call option and you sell a put option on firm ABC. The call option has a strike price of $50 and you receive a premium of $4. The put option also has a strike price of $50 and you receive a premium of $4. Both options expire at the same time in three months from now.
What is your maximum possible profit?
A) Unlimited
B) $50
C) $42
D) $58
E) $8
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