Question: Construct a table showing the payoff from a long strangle when put options with strike prices $10 and call options with a strike price of

  1. Construct a table showing the payoff from a long strangle when put options with strike prices $10 and call options with a strike price of $15 are used. (4 marks)
  2. Describe a situation where you would use a long strangle option spread. (1 mark)
  3. Describe a different option strategy that could be used for the same purpose, outlining a comparative advantage and disadvantage of this strategy compared with the long strangle. (2 marks)

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