- Sell call option with strike price $167.5- Sell put option with strike price $141
- Total premium income: $195
- Maximum profit: $195 (if stock price is between $141 and $167.5 at expiration)
- Risks:
- Stock price surges above $167.5: potential loss from sold call option
- Stock price plummets below $141: potential loss from sold put option
- Breakeven points: $169.45 (upper) and $139.05 (lower)
- Suitable for investors expecting narrow stock price fluctuations with uncertain direction- Return on investment: 1.27% (annualized return: 231%)
This strategy involves selling both call and put options with different strike prices, generating premium income while taking on potential risks if the stock price moves significantly.
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