Chapter 06 · Section 6.1

Loss Potential

Market Outlook  : BEARISH
Profit Potential: limited to 
                  the net premium
loss Potential  :
Breakeven Point :

The investor's potential loss is:

b) limited.
Yes. If the market rises, the options will offset one another. At any price greater than the high exercise price, the maximum loss will equal: high exercise price - low exercise price - net premium Continue