The share of Netflix INC. has been trading in a narrow price range for the...
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The share of Netflix INC. has been trading in a narrow price range for the past month and Ash is convinced that the share will break out of that range in next three months. The current price of the stock is $100 per share, the price of a three-month call option is with an exercise price of $100 is $10, and a put with same exercise price and expiration date costs $7. What strategy would Ash use to exploit the future price movements? How far would the price have to move for Ash to make profit on initial investment?
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