Chapter 02 · Section 2.1
The horizontal axis on the profit/loss diagram
On the profit/loss diagram, the horizontal axis represents:
d) the option premium.
No. The option premium can appear on the graph, but not on the horizontal axis. It appears sometimes on the vertical axis because the profit/loss can depend on the premium initially paid.
e) None of the above.
a) the price of the underlying asset at the time the option is purchased.
b) the price of the underlying asset at time of expiration/exercise.
c) time until expiration.
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