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  • Bear Spread: 1 Short Call at Low Net Pay Off 1 Long Call at High MPS

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    Jaleel Sherazi
    17 views4 pages
    The document describes and compares the payoff profiles of different option spread strategies: - A bear spread uses one long call at a high strike and one short call at a low strike. It profits from downward movements in the underlying asset. - A butterfly spread uses one long call at a high strike, one long call at a low strike, and two short calls at the middle strike. It profits from little movement in either direction. - A strip spread uses one long call at a low strike and two short calls at the low strike. It profits from upward movements in the underlying asset.

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    international finance graphs

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    IF GRAPHS

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    The document describes and compares the payoff profiles of different option spread strategies: - A bear spread uses one long call at a high strike and one short call at a low strike. It profits from downward movements in the underlying asset. - A butterfly spread uses one long call at a high strike, one long call at a low strike, and two short calls at the middle strike. It profits from little movement in either direction. - A strip spread uses one long call at a low strike and two short calls at the low strike. It profits from upward movements in the underlying asset.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    17 views4 pages

    Bear Spread: 1 Short Call at Low Net Pay Off 1 Long Call at High MPS

    Uploaded by

    Jaleel Sherazi
    The document describes and compares the payoff profiles of different option spread strategies: - A bear spread uses one long call at a high strike and one short call at a low strike. It profits from downward movements in the underlying asset. - A butterfly spread uses one long call at a high strike, one long call at a low strike, and two short calls at the middle strike. It profits from little movement in either direction. - A strip spread uses one long call at a low strike and two short calls at the low strike. It profits from upward movements in the underlying asset.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
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    Download as xls, pdf, or txt
    of 4

    BEAR SPREAD

    MPS

    1 Long Call @ High

    1 Short Call @ Low

    Net Pay off

    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    110
    120
    130
    140
    150

    -2
    -2
    -2
    -2
    -2
    -2
    -2
    8
    18
    28
    38
    48
    58
    68
    78

    3
    3
    3
    3
    3
    -7
    -17
    -27
    -37
    -47
    -57
    -67
    -77
    -87
    -97

    1
    1
    1
    1
    1
    -9
    -19
    -19
    -19
    -19
    -19
    -19
    -19
    -19
    -19

    0
    1

    10

    11

    12

    13

    14

    15

    -5
    Series1
    -10

    -15

    -20

    BUTTERFLY SPREAD

    MPS

    1 Long Call @ High

    1 Long Call @ Low

    2 Short Call @
    Middle

    Net Pay off

    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    110
    120
    130
    140
    150

    -2
    -2
    -2
    -2
    -2
    -2
    -2
    8
    18
    28
    38
    48
    58
    68
    78

    -3
    -3
    -3
    -3
    -3
    7
    17
    27
    37
    47
    57
    67
    77
    87
    97

    4.5
    4.5
    4.5
    4.5
    4.5
    4.5
    -15.5
    -35.5
    -55.5
    -75.5
    -95.5
    -115.5
    -135.5
    -155.5
    -175.5

    -0.5
    -0.5
    -0.5
    -0.5
    -0.5
    9.5
    -0.5
    -0.5
    -0.5
    -0.5
    -0.5
    -0.5
    -0.5
    -0.5
    -0.5

    10
    8
    6
    4

    Series1

    2
    0
    1

    -2

    10

    11

    12

    13

    14

    15

    STRIP SPREAD

    MPS

    1 Long Call @ Low

    2 Short call @ Low

    Net Pay off

    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    110
    120
    130
    140
    150

    -3
    -3
    -3
    -3
    -3
    7
    17
    27
    37
    47
    57
    67
    77
    87
    97

    4
    4
    4
    4
    4
    4
    4
    -16
    -36
    -56
    -76
    -96
    -116
    -136
    -156

    1
    1
    1
    1
    1
    11
    21
    11
    1
    -9
    -19
    -29
    -39
    -49
    -59

    30
    20
    10
    0
    -10
    -20
    -30
    -40
    -50
    -60
    -70

    10

    11

    12

    13

    14

    15
    Series1

    STRAP SPREAD

    MPS

    2 Long Call @ Middle

    1 Short Call @ middle

    Net Pay off

    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    110
    120
    130
    140
    150

    -4.5
    -4.5
    -4.5
    -4.5
    -4.5
    -4.5
    15.5
    35.5
    55.5
    75.5
    95.5
    115.5
    135.5
    155.5
    175.5

    2.25
    2.25
    2.25
    2.25
    2.25
    2.25
    -7.75
    -17.75
    -27.75
    -37.75
    -47.75
    -57.75
    -67.75
    -77.75
    -87.75

    -2.25
    -2.25
    -2.25
    -2.25
    -2.25
    -2.25
    7.75
    17.75
    27.75
    37.75
    47.75
    57.75
    67.75
    77.75
    87.75

    100
    90
    80
    70

    60
    50

    Series1

    40
    30
    20

    10
    0
    -10

    10

    11

    12

    13

    14

    15

    STRADDLE SPREAD

    MPS

    1 Long Call @ Middle

    1 Short Call @ Middle

    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    110
    120
    130
    140
    150

    -2.25
    -2.25
    -2.25
    -2.25
    -2.25
    -2.25
    7.75
    17.75
    27.75
    37.75
    47.75
    57.75
    67.75
    77.75
    87.75

    2.25
    2.25
    2.25
    2.25
    2.25
    2.25
    -7.75
    -17.75
    -27.75
    -37.75
    -47.75
    -57.75
    -67.75
    -77.75
    -87.75

    1 Long Call @ High 1 Short Call @ Low


    -2
    -2
    -2
    -2
    -2
    -2
    -2
    8
    18
    28
    38
    48
    58
    68
    78

    2
    2
    2
    2
    2
    2
    2
    -8
    -18
    -28
    -38
    -48
    -58
    -68
    -78

    Net Pay off


    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    0

    0.9
    0.8
    0.7

    0.6
    0.5

    Series1

    0.4

    0.3
    0.2
    0.1
    0

    10

    11

    12

    13

    14

    15

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