Change significantly over the next three months

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Reference no: EM131875763

You think the price of AMZN stock, which is currently $900 is likely to change significantly over the next three months, you are just not sure which direction. So you buy a long straddle position, with a call and put option, worth $27 and $25 per share, respectively, three months to expiration, and a strike price of $900.

If at expiration AMZN is trading at $875, what is your net profit on this position?

Remember that option contracts come in multiples of 100 shares.

Reference no: EM131875763

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