Exploit your conviction about the stock

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The common stock of ABC INC. has been trading in a narrow price range for the past month, and you are convinced it is going to stay in that range in the next three months. The current price of the stock is $100 per share and the three month call option with exercise price of $100 is $10. The price of the three month put option on ABC stock with an exercise price of $100 is $8.50. What would a simple option strategy to exploit your conviction about the stock price's future movements? What would be the break even points of your strategy? What would be the profit if stock price is $90 at the option expiration date?

Reference no: EM132144452

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