Profits is a bad term in this case since you will not be making money. Minimizing losses is probably the closest to what he meant.

The transaction that he is referring to is the buying of the flag. It would technically be a service one is buying so transaction is a proper term for it.

He could have worded it better, yes, but for you to act like he doesn't understand how this works falls on your lack of understanding what he was trying to say.