12 lines
808 B
Plaintext
12 lines
808 B
Plaintext
EXHIBIT 1.1 Long Intel call.
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Exhibit 1.1 is an at-expiration diagram for the Intel 22.50 call. It shows
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the profit and loss, or P&(L), of the option if it is held until expiration. The
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X-axis represents the prices at which INTC could be trading at expiration.
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The Y-axis represents the associated profit or loss on the position. The at-
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expiration diagram of any long call position will always have this same
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hockey-stick shape, regardless of the stock or strike. There is always a limit
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of loss, represented by the horizontal line, which in this case is drawn at
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−0.85. And there is always a line extending upward and to the right, which
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represents effectively a long stock position stemming from the strike.
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The trade-offs between a long stock position and a long call position are
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shown in Exhibit 1.2 . |