Final answer:
The Collar strategy is the correct option for a Zoom executive to maintain the portfolio value between $325 and $475 per share. This involves buying a put option and selling a call option at specified strike prices to limit the portfolio value within a certain range.
Step-by-step explanation:
The best strategy for a Zoom executive who owns a significant amount of Zoom stock and wants to ensure that the value of their portfolio remains between $325 and $475 per share is the Collar strategy. A Collar is an options strategy that is used to protect against large losses, but it also limits large gains. The executive can implement a Collar by buying a protective put, which gives the right to sell the stock at a specified price (strike price), ensuring a minimum selling price of the stock. The executive would also sell a call option, which gives someone else the right to buy the stock at another specified price, providing an upper limit to the profit potential. This is an effective strategy to cap both the downside risk and upside potential, securing the portfolio between the range of the two strike prices.
Considering the stock trading at $400/share, the executive would buy a put option with a strike price of $325 and sell a call option with a strike price of $475. By doing so, they are ensured that the value will not go below $325 as they can exercise the put option at $325, and if the stock goes above $475, the call option holder will likely exercise their option, capping the executive's profit at $475 per share.