OPTION TRADING STRATEGY FORMULAS - 1

[sunandaC]

*MARRIED PUT

(Stock Price – Strike Price) + Put Price = Maximum Loss

*PROTECTING UNREALIZED PROFIT

(Strike Price – Put Price) – Initial Stock Purchase = Unrealized Profit

*COVERED CALL POTENTIAL

(Call Price + Strike Price) – Stock Price = Covered Call Potential
*

BULL SPREAD (LONG CALL SPREAD)

Difference between Strike Prices – Debit Paid = Maximum Profit

(The debit Paid is the maximum loss.)
*
BULL SPREAD (SHORT PUT SPREAD)

Difference between Strike Prices – Credit = Maximum Loss

(The credit received is the maximum profit.)
*
BEAR SPREAD (LONG PUT SPREAD)

Difference between Strike Prices – Debit Paid = Maximum Profit

(The debit Paid is the maximum loss.)

*BEAR SPREAD (SHORT CALL SPREAD)

Difference between Strike Prices – Credit = Maximum Loss

(The credit received is the maximum profit.)

 

[rosemarry2]

*MARRIED PUT

(Stock Price – Strike Price) + Put Price = Maximum Loss

*PROTECTING UNREALIZED PROFIT

(Strike Price – Put Price) – Initial Stock Purchase = Unrealized Profit

*COVERED CALL POTENTIAL

(Call Price + Strike Price) – Stock Price = Covered Call Potential
*

BULL SPREAD (LONG CALL SPREAD)

Difference between Strike Prices – Debit Paid = Maximum Profit

(The debit Paid is the maximum loss.)
*
BULL SPREAD (SHORT PUT SPREAD)

Difference between Strike Prices – Credit = Maximum Loss

(The credit received is the maximum profit.)
*
BEAR SPREAD (LONG PUT SPREAD)

Difference between Strike Prices – Debit Paid = Maximum Profit

(The debit Paid is the maximum loss.)

*BEAR SPREAD (SHORT CALL SPREAD)

Difference between Strike Prices – Credit = Maximum Loss

(The credit received is the maximum profit.)

Hey dear,

Please check attachment for Notes on Simple Steps to Option Trading, so please download and check it.