sgupta0827

This is some great feedback...thanks guys. After nuppal's post, i will never forget put-call parity again!!!!

My main concern is remembering the following:

covered call: max gain= x - s + premium, max loss = s - premium paid, breakeven= s - premium paid

protective put: max gain unlimited, max loss s-x+premium paid, breakeven = s + premium

It is weird...I cannot remember these when they come up in questions. i fully understand the individual option payouts, but when it comes to combining them, I blank. I'll spend 5 minutes drawing arrows and thinking this stuff out, but wind up reversing a sign or something. Some of them make sense intuitively, but others are just pissing me off.

Any good acronyms or logic behind thinking these out would be greatly appreciated.