The stock XYZ has been trading in a relatively narrow range recently, and you are convinced that
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Question:
The stock XYZ has been trading in a relatively narrow range recently, and you are convinced that it is going to break far out of that range in the next 3 months. Yo do not know whether it will go up or down, however. Current stock price is $100. A call and a put option are available on the stock. Both the call and put have 3 months until expiry date and $100 strike price. What would be the most suitable options strategy in line with your conviction about the stock price's future movements?
- A.Sell put option and sell call option on the stock
- B.Buy put option and buy call option on the stock
- C.Buy put option and sell call option on the stock
- D.Sell put option and buy call option on the stock
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