Donna Donie, an option analyst at UMB Students Managed Fund, believes that the market will be volatile in the near future, but Donie does not feel particularly strongly about the direction of the movement. With this expectation, Donie decides to buy both a call and a put with the same exercise price and the same expiration on the the TRT stock trading at 528. Donie buys one call option and one put option on TRT stock with the following exercise price and the premiums. TRT
Donna Donie, an option analyst at UMB Students Managed Fund, believes that the market will be volatile in the near future, but Donie does not feel particularly strongly about the direction of the movement. With this expectation, Donie decides to buy both a call and a put with the same exercise price and the same expiration on the the TRT stock trading at 528. Donie buys one call option and one put option on TRT stock with the following exercise price and the premiums. TRT Materials Option Pricing Data (U.S.S) What is the name of the equity option strategy Donie has taken for the position? Characteristic Call Option Put Option Premium 54 S1 Strike Price $25 $25 Time to Expiration 90 days from now 90 days from now A. Bull spread strategy B. Straddle strategy C. Strangle strategy D. Protective put strategy
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