protective.put: Visualization of Protection Selling Strategy (Reverse...

In czxa/FMFE: Options and Futures in Financial Mathematics and Financial Engineering

Description

The protective.put() function generates a graph showing the profits and losses of both long and short put options and stock portfolios. The reason for the construction of the strategy is to be bullish on the market, but also worried about the future stock price decline. If the future stock price falls, put options can be executed to compensate for the loss. Its reverse operation is short on the market, but also worries about the future stock price rise. If the future stock price rises, the option fee obtained by short put option can compensate for the loss.

Usage

protective.put(K = 40, opt = 5, S = 50, position = "long")

Arguments

K	Execution Price of Put Options
opt	The Price of Put Options
S	Current stock price, default value is 42
position	It specifies whether to use a positive strategy to protect the right to sell (multi-selling and underlying stocks at the same time), or a reverse strategy to protect the right to sell (short selling and underlying stocks at the same time).

Note

If there is a mutual occlusion problem in the image, you can run the dev. new () command first. If there are still occlusion problems, you can directly run the protective. put command to call out the source code of the function, and eliminate the occlusion problem by modifying the corresponding graphic parameters.

References

John C.Hull. Options, Futures, and other Derivatives 9ed

See Also

writing.call

Examples

protective.put(K = 40, opt = 5, S = 42)
protective.put(K = 40, opt = 5, S = 42, position = "short")

czxa/FMFE documentation built on Nov. 6, 2019, 4:58 a.m.