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Put payoff diagram (video) | Khan Academy

When trading options, we have quite a few moving parts to juggle. Fortunately, technology now gives us tools that make this much easier. One of those tools is the option payoff graph, also called the option payoff graph, also called the risk graph.

To view the profit and loss possibilities of an option position, there is a standard format for portraying them graphically. The option payoff graph for this short put trade looks like this:. The gray line on this graph relates the stock price at the option expiration date to the amount of profit or loss that the option position would make with the stock at that price.

These graphs take a little getting used to for those of us accustomed to using stock price charts. Note these points about the payoff graph:.

This will foreign exchange rates pakistan our profit.

There is quite a bit more that the option payoff graph can tell us. Celebrating 20 Years Transforming Lives for Two Decades Online Trading Academy has its roots in the how to get easy money on pocket frogs trading floor in the Western US, founded in by Eyal Shahar.

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Lessons From The Pros Main Contributors Put options payoff graph FAQ Free Half-Day Class February 2, Are You Asking The Proper Questions?

Put Option Payoff Diagram and Formula - Macroption

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