Stock A is currently trading @ 5600. Sell Straddle can be created by Selling 50 Call...
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Stock A is currently trading @ 5600. Sell Straddle can be created by Selling 50 Call and 50 Put Options for Strike 5600 having premium of 65 and 35 each, respectively. Ryan did this strategy, and his profit is shown below 6000 4000 2000 0 -2000 5300 54 00 5500 5600 5700 5800 5900 -4000 -6000 -8000 -10000 -12000 Q6. Discuss advantages/disadvantages of this strategy. What is the max that Ryan can lose and what is the breakeven stock price? Stock A is currently trading @ 5600. Sell Straddle can be created by Selling 50 Call and 50 Put Options for Strike 5600 having premium of 65 and 35 each, respectively. Ryan did this strategy, and his profit is shown below 6000 4000 2000 0 -2000 5300 54 00 5500 5600 5700 5800 5900 -4000 -6000 -8000 -10000 -12000 Q6. Discuss advantages/disadvantages of this strategy. What is the max that Ryan can lose and what is the breakeven stock price?
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Answer rating: 100% (QA)
Selling a straddle is a popular options trading strategy that involves selling both a call and a put option at the same strike price and expiration date This strategy can generate income when the trad... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
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