Payoffs
Figure 14.2 illustrates the payoffs of a financial future transaction. The dotted line represents the contract to buy (a so-called long position). A profit is made when the price of the underlying instrument goes up.
Figure 14.2. The payoffs of a financial future transaction
The solid line shows the result of the contract to sell (a short position). A profit is made when the price of the underlying instrument goes down.
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