Question

The current gas price is $3.15. A gas trader buys a gas call option with a strike price of $3.00 and sells a put option with a strike price of 3.25. The option prices are 0.20 and 0.10 dollars respectively and both options expire at the same date. Describe the value of the trader’s position. You can do so by either plotting a chart or showing calculations.

Answer 1

Here we will be calculating total profit or loss for option holder under both positions on expiration date.

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