a. Compare the profit diagram in Figure 17.2B to the payoff diagram for a long position in a put option. Assume the exercise price of the option equals the initial futures price.

b. Compare the profit diagram in Figure 17.2B to the payoff diagram for an investor who writes a call option.

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Profit Fo -PT A. Long futures profit = PT-Fo Profit Fo PT B. Short futures profit = F₁ - PT FIGURE 17.2 Profits to buyers and sellers of futures and options contracts A: Long futures position (buyer) B: Short futures position (seller) C: Buy call option