An investor "shorts" a stock and protects her position by purchasing a call on the stock at an exercise price that makes the call "on [or at] the money." What the resulting profit profile will look like. Explain.  

The result in will look like purchasing a put on the stock.  Which would be better for the investor, shorting plus buying the call or buying a put directly?  Explain.

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When an investor shorts a stock and purchases a call option that is at the money they are creating a ... View the full answer