Chapter 06 · Section 6.1

Profit Potential

Market Outlook   :  BEARISH
Profit Potential:
Loss Potential   :
Breakeven Point  :

The investor's profit potential is:

b) limited.
Yes. When the market price falls to or below the lower exercise price, both options will be in-the-money and the trader will realize his maximum profit when he recovers the net premium paid for the options. Continue