Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the payoff for a Bull Call Spread strategy?
What is the payoff for a Bull Call Spread strategy?
- Limited to the difference between the two strike prices, minus the net premium paid (correct)
- Limited to the net premium received
- Unlimited on the upside and limited on the downside
- Limited to the difference between the two strike prices, plus the net premium paid
What is the payoff for a Long Straddle strategy?
What is the payoff for a Long Straddle strategy?
- Limited to the difference between the two strike prices, minus the net premium paid
- Limited to the net premium received
- Limited to the difference between the strike price and the net premium paid on the downside
- Unlimited on the upside and limited on the downside (correct)
What is the payoff for a Short Straddle strategy?
What is the payoff for a Short Straddle strategy?
- Limited to the net premium received (correct)
- Limited to the difference between the two strike prices, minus the net premium paid
- Limited to the difference between the strike price and the net premium paid on the downside
- Unlimited on the upside and limited on the downside
What is the payoff for an Iron Condor strategy?
What is the payoff for an Iron Condor strategy?
Signup and view all the answers
What is the payoff for a Butterfly Spread strategy?
What is the payoff for a Butterfly Spread strategy?
Signup and view all the answers
What is the payoff for a Bear Put Spread strategy?
What is the payoff for a Bear Put Spread strategy?
Signup and view all the answers
What is the payoff for a Short Straddle strategy?
What is the payoff for a Short Straddle strategy?
Signup and view all the answers
What is the payoff for an Iron Condor strategy?
What is the payoff for an Iron Condor strategy?
Signup and view all the answers
What is the payoff for a Long Straddle strategy?
What is the payoff for a Long Straddle strategy?
Signup and view all the answers
What is the payoff for a Bull Call Spread strategy?
What is the payoff for a Bull Call Spread strategy?
Signup and view all the answers
Flashcards are hidden until you start studying
Study Notes
Options Trading Strategies
- A Bull Call Spread strategy's payoff is limited to the difference between the strike prices of the two options, minus the net debit.
- A Long Straddle strategy's payoff is unlimited on the upside, with a maximum loss equal to the total premium paid for the options.
- A Short Straddle strategy's payoff is limited to the total premium received, with unlimited potential losses on the upside and downside.
- An Iron Condor strategy's payoff is limited to the difference between the credit and debit, with a maximum loss equal to the difference between the strikes.
- A Butterfly Spread strategy's payoff is limited to the difference between the credit and debit, with a maximum loss equal to the difference between the strikes.
- A Bear Put Spread strategy's payoff is limited to the difference between the strike prices of the two options, minus the net debit.
- Note that the payoffs for the Short Straddle and Iron Condor strategies are repeated questions, with identical answers.
- Note that the payoffs for the Long Straddle and Bull Call Spread strategies are repeated questions, with identical answers.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
