If a Stock Is Selling for $33 and You Expect

question 9

Essay

If a stock is selling for $33 and you expect the price not to fluctuate, what are the potential profits and losses from writing a straddle if a call option at $35 sells for $3 and the put option at $35 sells for $4

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Definitions:

E-Signatures

E-signatures, or electronic signatures, are a digital form of signing documents, legally recognized as equivalent to traditional handwritten signatures in many jurisdictions, enabling quicker and more efficient document processing.

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing in order to be enforceable, such as contracts for the sale of land or goods over a certain value.

Breached Contract

A breached contract occurs when one party fails to perform their obligations under the terms of the agreement, leading to legal consequences and potentially damages.

Uniform Electronic Transactions Act (UETA)

A law adopted by most U.S. states that establishes the legal validity of electronic records and signatures for commercial transactions.