Question: A (long) strangle is constructed using a European call option and a European put option on the same common stock, the put has a strike
A (long) strangle is constructed using a European call option and a European put option on the same common stock, the put has a strike price of $40 while the call has a strike price of $45. The put premium is $2.31 while the call premium is $3.64. What is the net payoff to the trader if the appropriate option is exercised at an ending stock price of $17.88
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
