Manually calculate profit in riskprofile

Discussion in 'Options' started by Derrenoption, Oct 26, 2016.

  1. No problem, yes it must be the beers, I was going insane for a while :) Then we are on the same track now then.
    I think my calculation in the first post reflects the profit and loss at the 2 strikes then (*100).
     
    #21     Oct 26, 2016
  2. Expiry Price 105: -$75 <-- Initial Cash flow (no value at expiry)
    Expiry Price 110: $425 <-- 105 strike worth (110-105) $5 each, so $500-75;

    You referenced Delta in your PnL, which is not appropriate. This is at Expiration, so no Greeks exist (as IV has expired).
    The code snip I sent should not have my alcohol influence as for that I remembered to reverse the strike/price for the short Calls.
     
    #22     Oct 26, 2016
  3. Yes okay, I didn't know that it was wrong to calculate with the greeks(delta) at expiration.
    So, we only calculate from strike 105 to 110 (strike/underlying) price at expiration even that the underlying was at 100 when we entered the 105 strike?
    Yes it is easy to be confused sometimes of up/down/call/put/buy/sell.
     
    #23     Oct 26, 2016
  4. Understood! Sometimes a little alcohol helps, but as we just witnessed, sometimes not so much! :-(
     
    #24     Oct 26, 2016
  5. That is great, thanks! Then I have understood how to calculate this correctly. Yes alcohol has its own mind sometimes :)
     
    #25     Oct 26, 2016