Problem:
You establish a straddle on Walmart using September call and put options with a strike price of $50. The call premium is $4.25 and the put premium is $5
Required:
Question 1: What is the most you can lose on this position?
Question 2: What will be your profit or loss if Walmart is selling for $58 in September?
Question 3: At what stock prices will you break even on the straddle?
Note: Please describe comprehensively and provide step by step solution.