If you purchase a straddle on euros, this implies that you:
A) finance the purchase of a call option by selling a put option in the euros.
B) finance the purchase of a call option by selling a call option in the euros.
C) finance the purchase of a put option by selling a put option in the euros.
D) finance the purchase of a put option by selling a call option in the euros.
E) none of the above

Question

Quizplus · Accepted Answer

A straddle involves buying both a call option and a put option on the same asset with the same strike price and expiration date. It does not involve financing one option by selling another.

If You Purchase a Straddle on Euros, This Implies That