You form a long option straddle (a combination of a long call and a long put with the same exercise price) on the Mexican peso. Which of a) through c) results in a profit on your position?

Question

Quizplus · Accepted Answer

A long option straddle is a strategy that profits from significant price movements, regardless of the direction. A large decrease or increase in the value of the Mexican peso, as well as a combination of both or a significant increase in volatility, can all result in profits on the position. Therefore, D (More than one of the above) is the correct choice.

You Form a Long Option Straddle (A Combination of a Long