What would be the cost of a straddle using these (nearest expiration date which is May 5th) options?

b) At expiration, what would be the break-even stock prices for the straddle? What would be the percentage increase or decrease in the stock price required to break even?

c)What would be the cost of the straddle using the later expiration date?

d) At expiration, what would be the break-even stock prices for the straddle? What would be a percentage increase or decrease in the stock price required to break even?

e)Suppose you take a long position in the straddle in part (a) and simultaneously take a short position on the straddle in part (c). That is, you are long straddle with nearest-expiration-date options, and short straddle with later-expiration-date options. When would such a position make sense (what are you betting on?)

AAPL Price as of May 2nd, 2023: $168.54		K (Strike Price) = $170
Expiration Date	Price of Puts	Price of Calls
May 5th, 2023	$4.3	$2.56
June 2nd, 2023	$6.02	$4.75

Answer rating: 100% (QA)

a To calculate the cost of a straddle you need to add the prices of the put and call options For the nearest expiration date May 5th 2023 Cost of stra... View the full answer