Question: Tom purchases a call and a put at the strike price of $24 for an Ells Co stock. It cost him $2.50 to buy the
Tom purchases a call and a put at the strike price of $24 for an Ells Co stock. It cost him $2.50 to buy the call and $ 3.00 to buy the put. This is clearly a long straddle strategy. That means that there are 2 possible break-even points (two possible expiration date spot prices for Elis Co. Stock, Where Tom's net profit is 0). What is the absolute difference between the expiration spot prices for these two break-even points? Provide After you provide the answer, as a mental exercise, try to think about what this means in terms of the range of values that Tom expects Els Co. Stock will have in near future 2 decimals
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