Volatility to continue for a few weeks based on recent news

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Reference no: EM131049252

The market price of ZYX stock has been volatile and you expect that volatility to continue for a few weeks based on recent news. Due to this belief you decide to purchase calls and puts to manage your exposure. You purchase a one-month call option with a strike price of $25 and an option price of $1.10. You also purchase a one-month put option with a strike price of $25 and an option price of $0.40. What will be your total profit or loss on these option positions if the stock price is $28.0 on the day the options expire?

A. $300

B. -$150

C. $150

Reference no: EM131049252

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