You Are Long Both a Put Option and a Call

question 33

Essay

You are long both a put option and a call option on Rockwood stock with the same expiration date.The exercise price of the call option is $40 and the exercise price of the put option is $30.Graph the payoff of the combination of options at expiration.

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Definitions:

Bowlers

Players who engage in the sport of bowling, aiming to knock down pins with a ball.

Categorical Proposition

An assertion that either claims or rejects something about every individual within a category.

Shading

In art, shading refers to the technique of adding depth or solidity to an image through the use of variations in tone or color.

Logical Equivalent

Two statements are logically equivalent if, in every possible scenario, they either both are true or both are false.