That is not the same as the pnl equalling the cost compensated, instead the expected pnl in the approach could well be the same as the option value. $endgroup$To generate The 2 techniques similar it is best to think of investing/borrowing $PnL_1$ at charge $r$ making sure that it stays in the technique right until $t_2,.$ At that time yourOr does i
True P&L calculated by Finance/ Product Management and is based on the actual cost of the instrument on the market (or even the corresponding product if a market would not exist). This displays the true P&L In case the position is closed at sector rates.Ie: If We all know the stock will near close to the opening rate mainly because it constantly pe
True P&L calculated by Finance/ Item Regulate and is based on the particular cost of the instrument out there (or perhaps the corresponding design if a sector isn't going to exist). This demonstrates the real P&L if the place is shut at marketplace price ranges.Say that you invest in an away from the money option then the market just dies. You then