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20 Basic Options Strategies Payoff Table Notes
20 Basic Options Strategies Payoff Table Notes
20 Basic Options Strategies Payoff Table Notes
Step 1:
Compare daily market price with
exercise price Step 2:
Choose profit or
loss formula for
each trading day
Step 3:
Calculate daily total profit or loss
Day Market Price
PAYOFF 1 1488
TABLE 2 1540
3 1668
SHORT CALL 4 1750
Prepare payoff table for
short call strategy with 5 1880
exercise price of 1668 and
premium 83
PAYOFF TABLE SHORT CALL
DAY MP XP CONDITION FORMULA PROFIT CALCULATION PROFIT
1 1488 1668 MP < XP +VE PRM 83 83
2 1540 1668 MP < XP +VE PRM 83 83
3 1668 1668 MP = XP +VE PRM 83 83
4 1750 1668 MP > XP XP - MP + PRM 1668 - 1750 + 83 = 1
5 1880 1668 MP > XP XP - MP + PRM 1668 - 1880 + 83 = -129
Step 1:
Compare daily market price with
exercise price
Step 2:
Choose profit or
loss formula for
each trading day
Step 3:
Calculate daily total profit or loss
PAYOFF TABLE Day Market Price
LONG PUT 1 1420
Prepare payoff table for long
put strategy with exercise 2 1590
price of 1618 and premium 68
3 1618
4 1780
5 1900
PAYOFF TABLE LONG PUT
DAY MP XP CONDITION FORMULA PROFIT CALCULATION PROFIT
1 1420 1618 MP < XP XP - MP - PRM 1618 - 1420 - 68 = 130
2 1590 1618 MP < XP XP - MP - PRM 1618 - 1590 - 68 = -40
3 1618 1618 MP = XP -VE PRM -68 -68
4 1780 1618 MP > XP -VE PRM -68 -68
5 1900 1618 MP > XP -VE PRM -68 -68
Step 1:
Compare daily market price with
exercise price
Step 2:
Choose profit or
loss formula for
each trading day
Step 3:
Calculate daily total profit or loss
Day Market Price
PAYOFF 1 1420
TABLE 2 1590
3 1618
SHORT PUT 4 1780
Prepare payoff table for
short put strategy with 5 1900
exercise price of 1618 and
premium 68
PAYOFF TABLE SHORT PUT
DAY MP XP CONDITION FORMULA PROFIT CALCULATION PROFIT
1 1420 1618 MP < XP MP - XP + PRM 1420 - 1618 + 68 = -130
2 1590 1618 MP < XP MP - XP + PRM 1590 - 1618 + 68 = 40
3 1618 1618 MP = XP +VE PRM 68 68
4 1780 1618 MP > XP +VE PRM 68 68
5 1900 1618 MP > XP +VE PRM 68 68
Step 1:
Compare daily market price with
exercise price
Step 2:
Choose profit or
loss formula for
each trading day
Step 3:
Calculate daily total profit or loss
Prepared by
Dr Fahmi Abdul Rahim