You buy one Loews 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.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Buying both a call and a put option at the same strike price and expiration date is known as a long straddle strategy. This approach is used when an investor expects a significant price movement but is unsure of the direction.

You Buy One Loews June 60 Call Contract and One