FIGURE 02 / THE VALUE OF FLEXIBILITY

Opportunity gathers
around zero.

Explore the extra payoff from one final trade. At each account value, the higher curve identifies the better stock.

Time remaining 0.05Final interval, in model time unitsStock 2 price 0.38Stock 1 price stays at 1.00

Stock 1 · solidStock 2 · dashedVolatility 20% / 50%

Account value now 0.000Drag the slider or select a point on the chart.