You think Tesla (TSLA) has had a strong quarter and will continue to be strong. TSLA currently trades at $1612.42/share. You short a 3-month put on TSLA for $202.19 per share with a strike price of $1620.00. Assume a 3% interest rate per annum.
a) Draw a payoff and profit diagram of this position. Indicate your breakeven point.
b) Under what circumstances will you make money? What is your maximum profit?