(PRICE AT S 60

Buy stock 60
Short call
Strike Price 70
Premium 5
Stock Price BEP STOCK PAYOFF SHORT CALL PAYOFF TOTAL PAYOFF
0 75 -60 5 -55
5 75 -55 5 -50
10 75 -50 5 -45
15 75 -45 5 -40
20 75 -40 5 -35
25 75 -35 5 -30
30 75 -30 5 -25
35 75 -25 5 -20
45 75 -15 5 -10
50 75 -10 5 -5
55 75 -5 5 0
60 75 0 5 5
65 75 5 5 10
70 75 10 5 15
75 75 15 0 15
80 75 20 -5 15
85 75 25 -10 15
90 75 30 -15 15
95 75 35 -20 15
 long call payoff=max(-premium,S-St)
short call payoff=min(premium,St-S)

Chart Title
60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-20

-40

-60

-80

STOCK PAYOFF SHORT CALL PAYOFF TOTAL PAYOFF

S 60
Short Stock 60
Long call
Strike Price 70
Premium 5
Stock Price BEP stock payoff long call payoff total payoff
0 75 60 -5 55
5 75 55 -5 50 80
10 75 50 -5 45
15 75 45 -5 40 60
20 75 40 -5 35
40
25 75 35 -5 30
30 75 30 -5 25 20
35 75 25 -5 20
45 75 15 -5 10 0
1 2 3
50 75 10 -5 5
-20
55 75 5 -5 0
60 75 0 -5 -5 -40
65 75 -5 -5 -10
70 75 -10 -5 -15
75 75 -15 0 -15
80 75 -20 5 -15
85 75 -25 10 -15
90 75 -30 15 -15
95 75 -35 20 -15
 Chart Title
80

60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-20

-40

stock payoff long call payoff total payoff

S 60
Buy stock 60
Long Put
Strike Price 70
Premium 15
Stock Price BEP stock payoff long put payoff total payoff
0 55 -60 55 -5 MAX(0,-C8)-D6
5 55 -55 50 -5
10 55 -50 45 -5
15 55 -45 40 -5
20 55 -40 35 -5
25 55 -35 30 -5
30 55 -30 25 -5
35 55 -25 20 -5
45 55 -15 10 -5
50 55 -10 5 -5
55 55 -5 0 -5
60 55 0 -5 -5
65 55 5 -10 -5
70 55 10 -15 -5
75 55 15 -15 0
80 55 20 -15 5
85 55 25 -15 10
90 55 30 -15 15
95 55 35 -15 20
 Bullish long call limited loss unlimited profit
Bearish short call limited profit unlimited loss
MAX(0,-C8)-D6 Bearish long put limited loss unlimited profit
Bullish short put limited profit unlimited loss

Chart Title
80

60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-20

-40

-60

-80

stock payoff long put payoff total payoff

S 60
Short Stock 60
Short Put
Strike Price 70
Premium 15
Stock Price BEP stock payoff short put payoff total payoff
0 55 60 -55 5
5 55 55 -50 5
10 55 50 -45 5
15 55 45 -40 5
20 55 40 -35 5
25 55 35 -30 5
30 55 30 -25 5
35 55 25 -20 5
45 55 15 -15 0
50 55 10 -15 -5
55 55 5 -15 -10
60 55 0 -15 -15
65 55 -5 -15 -20
70 55 -10 -15 -25
75 55 -15 -15 -30
80 55 -20 -15 -35
85 55 -25 -15 -40
90 55 -30 -15 -45
95 55 -35 -15 -50
Combination of Long Lower strike price(In-the-money) call
option and Short Higher strike price(Ouf-of money) call
option
Expectation - A hedged position with anticipation of price
going up

Long Call(ITM)
Strike Price 30
Premium 3
BEP 33
 Chart Title
15

Short call 10
Stike Price 35
Premium 1 5

BEP 36
0
1 2 3 4
Price BEP long call payoff short call payoff total payoff -5
20 33 -3 1 -2
25 33 -3 1 -2 -10
30 33 -3 1 -2
-15
35 33 2 1 3
40 33 7 -4 3 long call payoff short call pay
45 33 12 -9 3
 Chart Title

3 4 5 6

all payoff short call payoff total payoff