A strangle is a trading strategy where an investor buys a call and a put with the
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A strangle is a trading strategy where an investor buys a call and a put with the same expiration date but different strike prices. The strike price of the call may be higher or lower than that of the put (when the strike prices are equal, it reduces to a straddle). Sketch the terminal profit diagrams for both cases and discuss the characteristics of the payoffs at expiry.
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he terminal profit diagrams for a strangle with the call strike price above the put strike price lef...View the full answer
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