Profit diagram for the buyer of a put option 81c


Profit diagram for the buyer of a put option 81c


A profit and loss diagram, or idagram graph, is a visual representation of dizgram possible profit and loss of an option strategy atYou are using an outdated browserYour browser, an old version of Internet Explorer, is not fully supported by Quizlet.Please download a newer web browser to improve your experience.Google ChromeMozilla Firefox.

Unformatted text preview: Page 3 of 23 A. the inverse of the call diagram along the put price B. unrelated to the call diagram no matter what the exercise price C. off mirror image of the call diagram around the exercise price D. exactly the same as the call diagram for the given exercise price 8. A puThe long put option strategy is a basic strategy in options trading where the investor buy put options with the belief that the price of the underlyingsecurity will go significantly below the striking price before theexpiration date.

Long Put ConstructionBuy 1 ATM PutPut Buying vs. Short SellingCompared to short selling the stock, it is more convenient to bet against a stock by purchasing put options as the investor does not optiion to borrow the stock to short. Additionally, the risk is capped to the premium paid for the put options, as opposed to unlimited risk when short selling the underlying stock outright.However, put options have a limited lifespan.




A for 81c put option buyer the diagram of profit

Profit diagram for the buyer of a put option 81c

Profit diagram for the buyer of a put option 81c



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