Can i have a put and call option at same time...?

Hi i'm a newbee to options.
can i have a put buy and call buy on same stock simulaneously.

Let the stock is at 61$.

I buy a 60$ strike call option at 5$ and one 60$ put at 2$ premium.Is this possible ?.

What my investment will do after 1 week . if stock is at

1) 70 $

2) 50$

<<<can i have a put buy and call buy on same stock simulaneously.>>>

Yes.

If the same strike price is used for both the call and the put it is called a "straddle".

If different strike prices are used for the call and the put it is called a "strangle".

If the strike price of the call is less than the strike price of the put it is sometimes called a "guts".

I'll repeat a quote I have given before from Natenberg's book "Option Volatility & Pricing" (page 187).

"While there is no substitute for experience, most traders quickly learn an important rule: straddles and strangles are the riskiest of all spreads. This is true whether one buys or sells these strategies. New traders sometimes assume the purchase of straddles and strangles is not especially risky because such strategies have limited risk. But it can be just as painful to lose money day after day when one buys a straddle or strangle and the market fails to move, as it is to lose the same amount of money all at once when one sells a straddle and the market makes a violent move. Of course, a trader who is right about volatility can reap large rewards from straddles and strangles. But an experienced trader know that such strategies offer the least margin for error, and he will usually prefer other strategies with more desirable risk characteristics."

In that quote the phrase "straddles and strangles are the riskiest of all spreads" is emphasized.

<<<Let the stock is at 61$.

I buy a 60$ strike call option at 5$ and one 60$ put at 2$ premium.Is this possible ?.

What my investment will do after 1 week . if stock is at

1) 70 $

2) 50$>>>

The only thing that can be said with certainty is that the spread will be worth at least $10.00 in either case since it cannot be worth less than its intrinsic value. The exact value of the spread cannot be determined without knowing some other factors, such as the amount of time until expiration and the implied volatility of the options.

If you want to see what the value would be under different circumstances you can, at no cost, download the "options toolbox" software from the CBOE page

http://www.cboe.com/LearnCenter/Software...

This is one of the option strategy, where high volatility is expected. More the stock price moves, more you gain. Just be cautious near the expiry date such that both call and put do not go out of money.

That is called a straddle I believe. You are buying a call at $60 and a put at $60. If the stock goes up you profit. If the stock goes down you profit. Yes you can do that. If the stock does nothing, you loose.

If it goes to 70, your 60 call is worth at least 10. your put is worth nearly nothing so you have made 3 10 - 7.

If it goes to 50, your call is worth almost nothing your put is worth 10. You have made 3 again 10-7. Perhaps a little more.

If the stock stays within a range of 56 to 63 you loose.