Analyze this and correct it: The $43 and $45 strike prices would be more suitable for a strangle option play on International Paper (IP) with a 7/5 expiration:$43 Strike Price: This strike price is in line with the current trading price of $43.25, making it a reasonable choice for the put option in the strangle. It provides a limited amount of room for price movement, which can be beneficial for the put option but may limit the potential profits from the strangle.$45 Strike Price: This strike price is slightly above the current trading price, offering some room for price movement before expiration. It also aligns with the 5-day and 10-day moving averages, which can be used as support levels in the strangle

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Analyze this and correct it: The $43 and $45 strike prices would be more suitable for a strangle option play on International Paper (IP) with a 7/5 expiration:$43 Strike Price: This strike price is in line with the current trading price of $43.25, making it a reasonable choice for the put option in the strangle. It provides a limited amount of room for price movement, which can be beneficial for the put option but may limit the potential profits from the strangle.$45 Strike Price: This strike price is slightly above the current trading price, offering some room for price movement before expiration. It also aligns with the 5-day and 10-day moving averages, which can be used as support levels in the strangle.

6/28/2024 01:58am

Aime

The $43 and $45 strike prices are suitable for a strangle option play on International Paper (IP) with a 7/5 expiration.

$43 Strike Price: This strike price is in line with the current trading price of $43.25, making it a reasonable choice for the put option in the strangle. It provides a limited amount of room for price movement, which can be beneficial for the put option but may limit the potential profits from the strangle.
$45 Strike Price: This strike price is slightly above the current trading price, offering some room for price movement before expiration. It also aligns with the 5-day and 10-day moving averages, which can be used as support levels in the strangle.

A long strangle with the IP July 2024 $43.00 put and the IP July 2024 $45.50 call, or a short strangle with the IP July 2024 $43.00 put and the IP July 2024 $45.50 call, would be more effective in taking advantage of current volatility and potential price movement. The strangle's effectiveness depends on actual price movement, and significant profits may only be realized if the stock price swings significantly before expiration.

When selecting strike prices for a strangle, consider the current trading price, volatility, and potential for price movement in the underlying stock. The strike prices should provide a good risk/reward ratio and allow for significant profits if the stock price swings in either direction before expiration.