You buy one Home Depot June 60 call contract and one June 60 put contract.The call premium is $5 and the put premium is $3. Your strategy is called
A)a short straddle.
B)a long straddle.
C)a horizontal straddle.
D)a covered call.

Question

Quizplus · Accepted Answer

This is a long straddle because the investor has bought both a call and a put option at the same strike price and expiration date. The investor is hoping to profit from a large price movement in either direction, regardless of which way the stock moves.

You Buy One Home Depot June 60 Call Contract and One