Using strike 225 and S1 $250 construct a long straddle and determine the profit and ROI.
- Using strike 225 and S1 $250 construct a long straddle and determine the profit and ROI.
Homework Answers
Premium paid = $1
Profit on long straddle = price of underlying asset - strike price - net premium paid
= $250 - $225 - $1
= $24
ROI = net profit/net premium paid
= 24/1
= 2400%
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Using strike 225 and S1 $250 construct a long straddle and determine the profit and ROI.
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