1. Short strangle options trading strategy consists of writing a call and a put option at different exercise prices. Construct a profit/loss diagram for this option strategy given the following information:
   1. Put option with a strike price X1= $25 and a premium of $1.5
   2. Call option with a strike price of X2=$32 and a premium of $2
2. What's your profit or loss if the stock price is S=$31?
3. Is the upside limited or not? Is the downside limited or not?

Answer rating: 100% (QA)

Short Strangle ProfitLoss Diagram A short strangle involves selling a call and a put option profitin... View the full answer