The change in payoff profile. Call Options: The call option provides the authority to the manager to purchase the future contract at a future price. The manager can use this option if the price is above the normal price. Selling put options obligate the manager to buy the future contracts at future price.

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Chapter 25, Problem 3QP

Summary Introduction

To explain: The change in payoff profile.

Call Options:

The call option provides the authority to the manager to purchase the future contract at a future price. The manager can use this option if the price is above the normal price. Selling put options obligate the manager to buy the future contracts at future price.

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