Shylock is a tragic character, but he represents more than that to various audiences. For Shakespeare's audience, Shylock would have been close to the Jewish stereotype found in many of the works of the Elizabethan era (and previous British writings). In Shakespeare's time, the Jew was often portrayed as a greedy villain whom writers used for humor's sake. Shakespeare does attempt to go beyond presenting Shylock as the stereotype of his day by eliciting some sympathy from the audience for Shylock's horrible plight at the play's end. However, before this point, the playwright makes Shylock look rather foolish. When Shylock discovers that his only child has eloped with a Christian and, more importantly, with his jewels, he states,
"I would my daughter were dead at my foot and the jewels in her ear . . ." (Act 3, Scene 1, Lines 87-89).
At this point, the audience laughs at Shylock's expense because he appears to be such a greedy, ornery old man that he would rather have his only child dead if he could regain his jewels.
Ironically, Shylock makes this statement right after his infamous "I Am a Jew" speech which powerfully criticizes the Christians' (and perhaps Elizabethan Christians') poor treatment of Jews. Because of contrasts in Shylock's character such as this, it is not accurate to label him solely as one type of archetype.
Look at Act 4 to see how Shylock meets the qualifications of a tragic hero. The audience does sympathize with him when he loses his possessions, his livelihood, and his faith.
I think Shylock is a tragic hero because when Antonio was asking for 3 thousand ducats, Shylock gave it to him only writing that a pound of flesh would be owed as a joke. Only after years of being insulted by Christians and his own daughter's betrayal did he want to get revenge and enforce his right to Antonio's one pound of flesh. If the one person you trusted above all others betrayed you to join the enemy, wouldn't you be the least bit angry. In Shylock's case it was his own daughter stealing the ring his wife gave him and a big chunk of his fortune, and leaving behind the Jewish faith to marry a Christian!
And the basic definition of the tragic hero being someone who is well off in the beginning and then undone by a fatal flaw, Shylock fits that description perfectly. Shylock was a fairly rich money lender who had the upper hand when Antonio and Bassanio came asking for money. His fatal flaws were greed, his pride as a Jew and his thirst for revenge. I would say more but I'm saving the rest for an essay I'm writing☺
What Scarlet Pimpernal says