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A trader buys a put option with a strike price of 35 and a

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Reference no: EM13622876

A trader buys a put option with a strike price of $35 and a call option with strike price of $50 on a stock. Both options have the same maturity. The call costs $4 and the put costs $6.

1. When does the trader make money and loose money?

2. When would you use such a trading strategy? Explain carefully your beliefs on which you base your speculation about the market.

Reference no: EM13622876

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