Chapter 06 · Section 6.1

Potential gains or losses

Your potential gains or losses are:

a) limited on the upside and unlimited on the downside.
b) limited on the downside and unlimited on the upside.
c) unlimited on both the upside and the downside.
• d) limited on both the upside and the downside.
  Yes. Say you had build a short 40-45-50 butterfly. The position would yield a profit only if the market moves below 40 or above 50. The maximum loss is also limited. Continue