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by feetfailmenot
1866 days ago
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I gives you $1K today. In exchange, we agree now, that in two month, I can buy your car for $10K if I want to. I just bought a 2-month expiry put option at a strike of $10k on your car. Two month later, I check the resell value for your car. If it's more than $10k, let's say 13, I buy yours at 10 and resell it at 13K. I won 3-1=$2k If it's less that $10k, I just pass, I lost $1k. |
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