Question: In the coming week, the outcomes from a class action lawsuit will result in a significant shock to the price of M ,
In the coming week, the outcomes from a class action lawsuit will result in a significant shock to the price of M which may be positive or negative. Thus, you decide to follow a Straddle strategy using a call option and a put option with strike which have premiums of and respectively. If the stock price is today, what is the total profit of your portfolio?
Keep in mind that each call option contract controls shares. Please round your answer to the nearest three decimals.
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