Question: A long strangle is an option strategy that involves the simultaneous buying of a slightly out-of-the-money put and a slightly out-of-the-money call of the same

A long strangle is an option strategy that involves the simultaneous buying of a slightly out-of-the-money put and a slightly out-of-the-money call of the same underlying asset and expiration date.

(a) Plot the payoff function at maturity.

(b) What is the view of the option trader long in a strangle?

(c) Compare the premiums of strangle and straddle.

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