Options & Showing Working

Hi All,

I wanted to get your thoughts on showing your work for calcs for options.

For example. I don’t remember the formula for a lot of the option strategies but I understand the underlying concept and how it works which works far better for me than remembering some formula which will just confuse me

For example, I don’t know the formula for figuring out the breakeven price for a butterfly spread, but when I look at the numbers it’s very easy for me the figure out in my head.

If I got a question in the test and it wants the break even price and I just write the answer, would I get full credit? let me know your thoughts.

The more steps you show the grader, the more likely you will receive some points. You’ve said you can look at the numbers and figure it out in your head: whatever you’re doing in your head, write it down! Give the grader something to show your thought process: draw the payoff graph (doesn’t have to be fancy), show answer = # + # - #, etc. Give 'em something - anything!!!

Scenario: what if you make a slip of the calculator for your final answer? If you’ve done the intermediate steps correctly, I would be more inclined to throw you some points for your work, but not for your final answer itself.

True, very valid point!

Thanks Breadmaker