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  3. the current price of a stock is rs.43.50. strike p

The current price of a stock is Rs.43.50. Strike price Call premium Put premium 43.30...

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Question

Finance

The current price of a stock is Rs.43.50.

Strike price Call premium Put premium

43.30 0.90 0.40

43.50 0.50 0.60

43.70 0.30 1.00

A speculator found the following options traded in the market.

She is of the opinion that the price is likely to experience wide variation though the direction is not clear. Suggest a suitable strategy and work out the pay-off profile over a range of prices from Rs.43.00 to Rs.44.00. (Round off the price to

10 paise)

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