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Payoff diagram

A chart of profit and loss at expiration against the underlying price; the standard way to see what a structure actually does.

Every options structure reduces to a set of straight lines with kinks at the strikes. Long options bend the line upward, short options bend it downward, and the vertical offset is the premium paid or received.

Drawing it before trading catches errors that no amount of Greek analysis will. If the shape is not what you meant, the strikes are wrong, and no adjustment later will fix a structure that was never the right one.

Example: XYZ at $50, long the $50 call at $2.30 and short two $55 calls at $0.80. The diagram rises from $50, peaks at $55 with a profit of $5.00 − $0.70 = $430, then falls, crossing zero near $59.30 and losing without limit above that. The upper breakeven is invisible in the Greeks and obvious on the chart.

Related: risk-graph, breakeven-price, max-loss

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