You establish a straddle on Walmart using September call and put options with a strike price of $66. The call premium is $5.75 and the put premium is $5.00.
a. What is the payoff on this position if Walmart is selling for $66 in September?
$
b. What will be your payoff if Walmart is selling for $46.2 in September?
$
c. What will be your payoff if Walmart is selling for $75.97 in September?
$
d. What is the cost of this investment strategy?
$
e. What will be your percent return if Walmart is selling $75.97 in September?
percent
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