You write a put on Kane with an exercise price of $3.50 and a premium of $1.00. At the same time you buy a call on Kane with an exercise price also at $3.50 and a premium of $1.25. Calculate the profit or loss on both positions simultaneously if just prior to option expiration Kane’s stock price is $3.00.
a. ($1.25)
b. ($0.50)
c. ($1.75)
d. $0.00
e. ($0.75)