1)Microsoft Corp. (US ticker: MSFT) is expected to release its Q3 earnings on October 21. MSFT is currently trading at $57.50. Premia on the November $55, $57.50 and $60 MSFT call options are currently $7.00, $4.50, and $3.00, respectively. And on the November $55, $57.50 and $60 MSFT put options, premia are currently $3.50, $5.00, and $7.00, respectively.

Your quantitative model is pointing to heightened MSFT stock price volatility around the Q3 earnings announcement but cannot determine the stock prices post-earnings direction. The best option strategy to profit from your models output on MSFT with minimal exposure is:

1. A long $57.50 straddle
2. A short $57.50 straddle
3. A short $55 $60 strangle
4. A long $55 $60 strangle
5. A $55 $57.50 strangle