Chapter 02 · Section 2.1

Short Call Position

a b c
d e f

Now short option positions: which of the following graphs represents a short call position?

a)
b)
c)
• d)
  No. If you are short a call, (ie. if you are the writer of a call) you have an unlimited loss potential if the price of the underlying goes up, and only a limited profit potential if the price of the underlying falls. (e) represents a short put.
  e)
  f)

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