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What Are the Two Options for Increasing Profits in a Small

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Essay

What are the two options for increasing profits in a small Internet-based company? Which path would you choose for a struggling unique, artsy, designer t-shirt company? Justify your answer with specific details and examples.


Definitions:

Put Option

An economic arrangement empowering the bearer with the right, albeit without the obligation, to sell a defined amount of a principal asset at a determined price within a set duration.

Call

An option contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a specified price within a specified time.

Put Option

An agreement that grants the holder the option, without the requirement, to sell a predetermined quantity of a fundamental asset at an agreed-upon price during a defined period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date, used for hedging or speculation.

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