Question: Another variation of the straddle is called a strangle. A strangle is the purchase of a call with a higher exercise price and A put

Another variation of the straddle is called a strangle. A strangle is the purchase of a call with a higher exercise price and A put with a lower exercise price. Evaluate the strangle strategy by examining the purchase of the August 165 put and 170 call. As in earlier problems, determine the profits for stock prices of 150, 155, 160, 165, 170, 175, and 180. Hold the position until expiration and graph the results. Find the breakeven stock prices at expiration. Explain why one would want to use a strangle?

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Buy August 165 put at 475 Buy August 170 call at 325 100Max0 165 S T 475 Max0 S T 1... View full answer

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