The common stock of the Avalon Corporation has been trading in a narrow range around $40 per share for months, and you believe it is going to stay in that range for the next three months. The price of a three-month put option with an exercise price of $40 is $3, and a call with the same expiration date and exercise price sells for $4.
-Selling a straddle would generate total premium income of _____.
A) $300
B) $400
C) $500
D) $700

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The Answer of The common stock of the Avalon Corporation has been trading in a narrow range around $40 per share for months, and you believe it is going to stay in that range for the next three months. The price of a three-month put option with an exercise price of $40 is $3, and a call with the same expiration date and exercise price sells for $4.
-Selling a straddle would generate total premium income of _____.
A) $300
B) $400
C) $500
D) $700

The Common Stock of the Avalon Corporation Has Been Trading