In this assignment, you will solve problems about Payoffs and Trading Strategies.
18. The options for Microsoft (stock price $25.84) are trading at the following prices:
Strike Calls Puts
22.50. 3.40. 0.10
25.00 1.25 0.30
27.50 0.15 1.80
State the trading ranges at maturity in which the net payoff of the following option
positions is positive: (a) 25.00 straddle, (b) 22.50 strip, (c) 27.50 strap, and (d) 22.50–
27.50 strangle