Question: Consider two put options with the same expiration but different strikes, E1 and E2 (with E1 < E2). Formulate the conditions on their prices P1

Consider two put options with the same expiration but different strikes, E1 and E2 (with E1 < E2). Formulate the conditions on their prices P1 and P2 so that the PNL graphs of the two puts (both long) intersect. Justify your answer by drawing all possible types of the graphs arrangement. Hint: there are three arrangements (not counting the borderline cases).

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