Create a straddle spread

a. Above what point do you start making money if the stock goes up? b. Below what point do you start making money if the stock goes down?

c. Where do you have a maximum loss?

d. Why would you create a position like this? e. Is this a high or low volatility spread?

Use the information in the table to answer the following questions. Create one spread per question from the prices in the chart. Create only one option spread for each question. For example if you were going to create a covered write you might want to buy 100 shares at $91 and write a May 100 call against it. Please use a different option than the example. The stock is trading at $91 per share Puts Calls May-85$7.50 May-90 S4.20 May-95 $1.901 May-85 $1.50 May-90 $3.10 May 95 5.90 May 00 $9.80 May 00 S0.70