Options call and put diagram
This is formed by buying the underlying and sell a call. The debit spread buy price is greater than the sell price giving you a net debit when you open the position. All rights reserved, no options call and put diagram or re-transmission of this document is permitted without express permission from Star Research, Inc. If underlying price is above the strike price, you exercise the option and you can immediately sell it on the market at the current underlying price.
Underlying price plotted on the X-axis. Observe how the PL vs Price Today would obviously have a zero profit if you closed the position today and the underlying price stayed the same. Tutorial 1 Tutorial 2 Tutorial 3 Tutorial 4. Home Calculators Tutorials About Contact.
This article is about financial options. The above Short Straddle position is a neutral strategy profitable if the underlying price remains the same. You can also see this in the payoff diagram where underlying price X-axis is
Articles needing additional references from October All articles needing additional references. Below the strike, the payoff chart is constant and negative the trade is a loss. You have the right to purchase the TV for the sale price up to 1 month regardless of how much the TV goes up or down in price during options call and put diagram period. Profit or loss of the position plotted on the Y-axis.
Buying a call option: The price of the call contract must reflect the "likelihood" or chance of the call finishing in-the-money. Please help improve this article by adding citations to reliable sources.