Series 7 - General Securities Representative Exam
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A trader bought a January 75 call for 3.00. At the same time he bought a January 65 Put for 2.50. Which of the following stock prices at expiration means that the trader made a profit?
$58.40
A
$61.80
B
$78
C
$70
D
Explanations
He paid 5.50 in premium by purchasing this strangle. He needs the price to be over $80.50 OR below $59.50 upon expiration to make a profit.