You believe that company ABC's stock price will not move much in the next month. Current stock

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You believe that company ABC's stock price will not move much in the next month. Current stock price is $40. Six one-month options are traded: calls and puts with strike price $35, $40, and $45. Please design two different trading strategies using options on company ABC's stock based on your belief. Please specify what option positions you would take and show payoffs and profits. Please compare two strategies and find out the stock price range in one month that one strategy has a higher profit than the other strategy.

Call K=35

Call K=40

Call K=45

Put K=35

Put K=40

Put K=45

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Related Book For answer-question

Organic Chemistry

ISBN: 9788120307209

6th Edition

Authors: Robert Thornton Morrison, Robert Neilson Boyd

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Posted Date: May 08, 2023 02:29 AM

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You believe that company ABC's stock price will not move much in the next month. Current stock

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Based on the belief that the stock price of company ABC will not move much in the next month we can design two different trading strategies using opti... View the full answer

Organic Chemistry

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