NOT KNOWN FACTUAL STATEMENTS ABOUT PNL

That is not similar to the pnl equalling the price paid out, as a substitute the predicted pnl on the technique might be similar to the option worth. $endgroup$For making The 2 solutions comparable you need to imagine investing/borrowing $PnL_1$ at amount $r$ to ensure that it stays during the technique right up until $t_2,.$ At that time yourA tod