Risk Graphs: Short Combo

-11-14-2009 2-37-17 PM.pngShortCombo

-The Short combo is comprised of a higher strike Short Call and a lower strike Long Put in the same expiration month.  The credit from the Short Call helps to finance the Long Put.  As a result, the position can have very little if any debit.  The strategy simulates very closely the risk profile of Short Stock, but for much less money.  It is a bearish position.  Study the risk graph and you should gain understanding of the risk and reward.  Robin

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