Chapter 02 · Section 2.1
Long put position
a
b
c
d
You have just seen the profit/loss diagram for a long call position. Which one of the diagrams above represents a long put position?
d)
No. Look at the left hand side of graph d: the blue line slopes downward, representing an unlimited loss potential instead of an unlimited profit potential for a fall in the price of the underlying asset.
a)
b)
c)
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