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Expect the stock price of gm to increase
Course:- Financial Management
Reference No.:- EM13891884




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Suppose that I expect the stock price of GM to increase by about 15% over the next two months from $50 to $57.50. To monetize my view, I sell a put option on GM with 2 months to maturity with X= $57.50 and buy aput option again with 2 months to maturity on GM and X=50. Is this a proper strategy for me? Explain.

PS: In all questions above X = the exercise price of the options, C = call premium, P = put premium

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