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Payoff chart from buying a butterfly spread. Profit from a long butterfly spread position. The spread is created by buying a call with a relatively low strike (x 1), buying a call with a relatively high strike (x 3), and shorting two calls with a strike in between (x 2).
Completed Tornado Diagram. Tornado diagrams, also called tornado plots, tornado charts or butterfly charts, are a special type of Bar chart, where the data categories are listed vertically instead of the standard horizontal presentation, and the categories are ordered so that the largest bar appears at the top of the chart, the second largest appears second from the top, and so on.
If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being in-the-money. If the underlying stock is priced cheaper than the call option's strike price, its intrinsic value is zero and the call option is referred to as being out-of-the-money. An out-of-the ...
For parity, the profit should be zero. Otherwise, there is a certain profit to be had by creating either a long box-spread if the profit is positive or a short box-spread if the profit is negative. [Normally, the discounted payoff would differ little from the net premium, and any nominal profit would be consumed by transaction costs.]
A positive risk reversal means the implied volatility of calls is greater than the implied volatility of similar puts, which implies a 'positively' skewed distribution of expected spot returns. This is composed of a relatively large number of small down moves along with the possibility of few but relatively large up moves.
A spread position is entered by buying and selling options of the same class on the same underlying security but with different strike prices or expiration dates. An option spread shouldn't be confused with a spread option. The three main classes of spreads are the horizontal spread, the vertical spread and the diagonal spread. They are grouped ...
Egg count for rare butterfly sees 'positive result' February 1, 2025 at 6:04 AM ... Colin Williams, from BBOWT, said the discovery of 43 eggs - an increase of 33% on 2022 - was a "positive result".
The first exit time (FET) is the minimum between: (i) the time in the future when the spot is expected to exit a barrier zone before maturity, and (ii) maturity, if the spot has not hit any of the barrier levels up to maturity.