Consider a trading position in options which involves i a


Consider a trading position in options which involves: i. A long position in a call with a strike price of X=70 and a call premium c=10 ii. A short position in a put with a strike price of X=70 and a call premium p=10 Both options have the same underlying stock and the same expiration date. Find and draw the payoff diagram for the position as a function of the Stock Price, ST [hint: find payoff if ST < 70, and payoff if ST > 70, and draw the payoff gaph]

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Financial Management: Consider a trading position in options which involves i a
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