A strangle is created by buying a put and buying a call on the same stock with
Question:
A strangle is created by buying a put and buying a call on the same stock with a higher strike price and the same expiration. A put with a strike price of $155 sells for $8.55 and call with a strike price of $165 sells for $10.40. Draw a graph showing the payoff and profit for a straddle using these options.
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.
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Total cost 1040 855 1895 Stock price Long call payoff ...View the full answer
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Related Book For 
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
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