A vertical sold for a credit, with puts or calls: the credit, the most it can lose, the breakeven and the return on the capital at risk.
| Price at expiry | Profit or loss at expiry |
|---|---|
| $82.00 | -$375.00 |
| $90.00 | -$375.00 |
| $93.75 | $0.00 |
| $95.00 | $125.00 |
| $100.00 | $125.00 |
| $108.00 | $125.00 |
A credit spread sells one option and buys a further out of the money one of the same type and expiry. The bought option caps the loss, so the most at risk is the width between the strikes less the credit.
A put credit spread profits when the price stays above the breakeven; a call credit spread when it stays below. Return on risk compares the most it can make with the most it can lose, which is the arithmetic of the structure and says nothing about how often either happens.
Iron condor calculator · Debit spread calculator · every calculator
Every price here is one you typed; nothing is fetched and nothing is stored. The numbers travel in the address of this page, so a result can be linked to. Results are at expiry for one structure, before commissions and fees, and assume no early assignment. An illustration of the arithmetic, not advice.