Describe the profit diagram to your constructed position as…
Describe the profit diagram to your constructed position as well (assume that a put costs P dollars and a call costs C dollars). What is this position called which you have constructed (i.e the name given to it)? (5 points) b) Referring to the previous question, describe the profit diagram of the market maker who is on the opposite side of this transaction (i.e the one who took the exact opposite position as you and created the options)? (1 point bonus) Fill in the blank: Combining the two profit diagrams together highlights that the options market is a ________________.
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