Mnemonic or Shortcut to memorize Straddle, Box Spread, etc.? bull

DoubleDip

Does anyone have a short cut/mnemonic/logic to memorize the various options for straddle, box spread, bull and bear spreads?

infinitybenzo

I think you theme will work for most part with little tweaks

for straddle:

Max Loss is the cost of the strategy (since you are long both call and put)
=> mx loss = c+p

Max Profit is the diff. in Xs minus cost of the strategy
since there is 1 strike price , instead of diff in Xs, its Strike -X minus cost of the strategy

B/E Xl+cost of the strategy or Xh-cost of the strategy
since there is no Xl or Xh , all we have is X same applies for B/E
B/e = X+cost of the strategy or X- cost of the strategy

I will hv to think abt butterfly

PalacioHill

For the first 3 strategies Bull Call, Bear Put and butterfly

Max Loss is the cost of the strategy
Max Profit is the diff. in Xs minus cost of the strategy
B/E Xl+cost of the strategy or Xh-cost of the strategy

I don't know of any shortcuts for others for others

hope this helps



Edited 1 time(s). Last edit at Monday, June 1, 2009 at 04:05PM by passthismofo.