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What is a straddle

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What is a straddle, and why would an investor choose to buy one? Assume an investor buys a $21 straddle on Macy's. At what stock prices at expiration will that position be profitable? Assume at expiration Macy's sells for $14: what will the % return be on the straddle? How much $ profit or loss will the investor earn per share?

Reference no: EM132352307

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