Financial options the stock currently trades at 40 in june, Ask an Expert

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(financial options) The stock currently trades at $40 in June. An option trader considers the following strategy concerning the stock XYZ. Trader sells one AUG 38 put for $1 and buys a AUG 42 call for 1$. Please construct a figure that depicts the value of the strategy and the profit at expiration. You may look at the stock price range btw $35-45. Please discuss also, what are the expectations of the trader about the future price of the stock? What are the main risks involved?

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Financial Management, Finance

Category:- Financial Management
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