Option Strategy Formulae - Approach
Trying to have a consistent & intuitive approach to deriving or getting to the formulae used to calculate maximum gain, maximum loss, breakeven, expiration value & profit at expiration for the covered calls, protective puts, bull spreads, bear spreads, long straddles and short straddles.
So far, I have a understanding of the:
- Options and underlying assets required to for each these strategies
- The payoff diagrams for each of these strategies.
What I am battling with is having a consistent & intuitive approach of determining the maximum gain, maximum loss, breakeven, expiration value & profit at expiration.
I have looked at various posts online but none of them provide sufficient detail. Your assistance will be appreciated.
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