Decide to sell both put and call option to create strangle

Assignment Help Financial Management

Reference no: EM131543513

You decide to sell both a put option and a call option to create a strangle. The put option has a strike price of $53 and you sell it for $5.50. The call option has a strike price of 62 and you sell it for 4.25. For what range of prices in the underlying stock will you be able to make a profit on the total position?

Reference no: EM131543513

Questions Cloud

What percent would net income increase : If sales should increase by 20%, by what percent would earnings before interest and taxes increase? What percent would net income increase?

What is the probability range of returns : If the stock's returns are normally distributed, what is the 68 percent probability range of returns for any one given year?

What is variance of these returns : What is the variance of these returns?

What is probability of up movement in risk neutral world : what is the percentage down movement? what is the probability of an up movement in a risk neutral world?

Decide to sell both put and call option to create strangle : You decide to sell both a put option and a call option to create a strangle.

What is the expected dollar value of your portfolio : At the end of one year, what is the expected dollar value of your portfolio?

Withdraw each month during his retirement : how much will he be able to withdraw each month during his retirement?

Capital budgeting criteria-ethical considerations : An electric utility is considering a new power plant in northern Arizona. Calculate the NPV and IRR without mitigation.

Upsides and downsides to the use of financial leverage : How can changes in a firm’s capital structure provide signals to investors in a market? Explore the upsides and downsides to the use of financial leverage.

User Account

All Pages