I have trouble understanding why having a call protects again S_T < K.
I thought that having a call would protect against having S_T>K, because by having the call, you are protected if S_T>K because you only have to pay K.
If S_T < K, it wouldn't matter because you would buy the stock for less than K, so actually you could say you would want S_T<K because then you are not paying the difference of K-S_T more than S_T.
I thought that having a call would protect against having S_T>K, because by having the call, you are protected if S_T>K because you only have to pay K.
If S_T < K, it wouldn't matter because you would buy the stock for less than K, so actually you could say you would want S_T<K because then you are not paying the difference of K-S_T more than S_T.
Implicit put in the American call