You have bought a European put and sold a European call on a company's stock, with...
You have bought a European put and sold a European call on a company's stock, with both options having the same exercise price of $30. This combined position is equivalent to:
Question 3 options:
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Homework Answers
Ans) A short position at a forward price of $30
Put option gives it's buyer right to sell underlying at specified price in future. Thus buying put option means building short position
call option gives it's seller obligation to sell underlying at specified price in future. Thus selling call option means building short position
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