Option Risk Profiles

Risk Graphs, also known as a risk/reward diagrams, payoff diagrams or profit/loss diagrams, are charts that represent the profit or loss of an option across a spectrum of prices. Risk Profiles allow option traders to evaluate the risk/reward characteristics of an option trading strategy. Risk Profiles display at a glance where are the areas of the highest gains and losses occur. This enables option traders to make more educated decisions without complex calculations. Risk profiles also allow option traders to identify option trading strategies with similar risk/reward profiles, making synthetic positions easier to create and manage. Risk Profiles are simple diagrams made up of 2 axis and a line representing option price at various prices of the underlying security. The horizontal axis or X-Axis represents stock price and the vertical axis or Y-Axis represents option profit or loss. 

RiskProfileExample

Is Risk/Reward Limited Or Unlimited
To find out if the risk/reward of an option trading strategy is limited or unlimited through a Risk Profile Graph, a Trader would look at the top end and bottom end of the graph line. If the top end of the graph line is pointing upwards, it is an option trading strategy with unlimited profit potential. If the top end of the graph line is pointing horizontally, it means that it is an option trading strategy with limited profit potential and will rise in price no further when a certain stock price has been reached.

Unlimitedprofitpotential Limited Profit Potenial

In Addition, if the bottom end of the profile risk graph line is pointing downwards, it is an option trading strategy with unlimited loss potential. If the bottom end of the profile risk graph line is pointing sideways, horizontally, it means that it is an option trading strategy with limited loss potential and will lose no more money beyond a certain stock price has been reached.

UnlimitedProPot Limited Loss Pot 

Direction of Profit

An option trading strategy turns a profit when the Risk Profile Graph line crosses above the X-Axis (horizontal axis). Remember, the center of a risk graph is the prevailing stock price when the chart is built and that stock price increases to the right and decreases to the left. If the Risk Profile Graph line crosses above the X-Axis to the right, it means that the stock price needs to increase in order to turn a profit. If the profile risk graph line crosses above the X-Axis to the left, it means that the stock price needs to decrease in order to turn a profit.

profit when Stock Rises Profit when Stock Falls

Where is Breakeven on an Option Trade
The Breakeven Point of an option trade is presented on the Risk Profile Graph as the point where the graph line touches the X-Axis (horizontal axis). This is the point where the option position neither gains nor losses money. In more complex strategies, there could be more than one breakeven point. Where the breakeven points are in relation to the center of the profile risk graph, it tells you which direction the stock price must go in order for the position to breakeven. 

BreakEven Strangle BreakevenCall

Option Strategy Risk Profiles
The following charts illustrate the profit and loss profiles for many popular option strategies.The profit and loss profiles simply show what your option trade profit or loss will be for various stock prices at expiration. It is important to understand that all profit and loss diagrams shown in this reference guide are drawn at expiration of the options. Please note that prior to expiration the diagrams can look very different. Just because a diagram shows a profit at a particular stock price at expiration does not mean that same strategy will be profitable at that same point prior to expiration. Still, the charts are important to understand because they help you get a feel for each strategy and what it is trying to accomplish.

Listed for each strategy:
Outlook: Tells whether the strategy is bullish, bearish or neutral. Bullish strategies make money when the underlying stock rises while bearish strategies make money when it falls and neutral strategies make money when the stock does not move.
Directional Risk: Describes what the risks are for each individual strategy. For example, if a strategy has unlimited risk if the underlying stock rises, this field will say “unlimited upside.” On many positions you may see “unlimited downside risk” meaning there is potential for unlimited losses if the stock falls. To be exact, this is not unlimited risk since a stock cannot fall below zero. However, since it is extremely rare to see a stock down to a price of zero, this risk is still considered to be unlimited.
Max gain: Shows the maximum amount of profit that could be made.
Max loss: Shows the maximum amount of loss that could be occur.
Breakeven: Shows the stock price (or prices) where the strategy breaks even; that is the point where the trader neither makes nor loses money.


 

Long Stock
Outlook: Bullish
Directional Risk: Purchase Price of Stock.
Max gain: Unlimited upside.
Max loss: Purchase price.
Breakeven: Purchase price + commissions.

 LongStock
 

Short Stock
Outlook: Bearish.
Directional Risk: Limited upside.
Max gain: Initial credit.
Max loss: Unlimited.
Breakeven: Sale price + commissions.

 Short Stock
 

Long Call
Outlook: Bullish.
Directional Risk: Limited downside.
Max gain: Unlimited upside.
Max loss: Premium (amount paid). Occurs if stock closes below strike price + premum paid at expiration.
Breakeven: Strike price + premium.
Synthetic option equivalent: Long stock Long put

 Long Call
 

Short Call
Outlook: Neutral to slightly bearish.
Directional Risk: Limited upside.
Max gain: Premium – Commissions (initial credit). Occurs if stock closes below strike price at expiration.
Max loss: Unlimited.
Breakeven: Strike price premium.

 Short Call
 

Long Put
Outlook: Bearish
Directional Risk: Limited upside.
Max gain: Occurs at a stock price of zero.
Max loss: Premium + Commissions (amount paid). Occurs if stock closes above strike price at expiration.
Breakeven: Strike price – premium.

 Long Put
 

Short Put
Outlook: Neutral to slightly bullish
Directional Risk: Limited downside.
Max gain: Premium – Commissions (initial credit). Occurs if stock closes above strike at expiration.
Max loss: Strike price – premium. Occurs at a stock price of zero.
Breakeven: Strike price – premium.
Synthetic equivalent: Long stock Short call (covered call).

 Short Put
 

Long Straddle
Position: Long call long put with same strike and time to expiration.
Outlook: (1) Extremely bullish or bearish but unsure of direction or
(2) Expecting an increase in implied volatility.
Directional Risk: None.
Max gain: Unlimited upside and Limited downside.
Max loss: Premiums paid for both options. Occurs if stock closes at strike price at expiration.
Breakeven (2 breakeven points):
Upper: Strike price call + put premium + commissions. Lower: Strike price – call + put premiums + commisions.

 Long Straddle
 

Short Straddle
Position: Short call short put with same strike and time to expiration.
Outlook: (1) Overall neutral outlook but can also be slightly bullish or slightly bearish if credit is large enough or (2) Expecting a decrease in implied volatility.
Directional Risk: Unlimited upside and Limited downside.
Max gain: Premiums received from both options. Occurs if stock closes at strike price at expiration.
Max loss: Unlimited.
Breakeven (2 breakeven points):
Upper: Strike price + Straddle price + commissions.
Lower: Strike price – Straddle price + commissions.

 Short Straddle
 

Long Strip
Position: Buy 2 puts and buy 1 call with same strike and time to expiration.
Outlook: (1) Extremely bullish or bearish but favoring bearish or
(2) Expecting an increase in implied volatility.
Directional Risk: None.
Max gain: Unlimited upside and Limited downside.
Max loss: Premiums paid for all options + commissions. Occurs if stock closes at strike price at expiration.
Breakeven (2 breakeven points):
Upper: Strike price + price paid of 3 options.
Lower: Strike price – price paid of 3 options.

 Long Strip
 

Short Strip
Position: Sell 2 puts and sell 1 call with same strike and time to expiration.
Outlook: (1) Neutral to slightly bullish or bearish but more fearful of upward move or (2) Expecting a decrease in implied volatility.
Directional Risk: Unlimited upside and downside.
Max gain: Premiums received for all options. Occurs if stock closes at strike price at expiration.
Max loss: Unlimited upside and downside.
Breakeven (2 breakeven points):
Upper: Strike price call and put premiums
Lower: Strike price – half the call and put premiums

 Short Strip
 

Long Strap
Position: Buy 2 calls and buy 1 put with same strike and time to expiration.
Outlook: (1) Extremely bullish or bearish but favoring bullish or
(2) Expecting an increase in implied volatility.
Directional Risk: None.
Max gain: Unlimited.
Max loss: Premiums paid for all options. Occurs if stock closes at strike price at expiration.
Breakeven (2 breakeven points):
Upper: Strike price half the call and put premiums. Lower:Strike price – the call and put premiums.

 Long Strap
 

Short Strap
Position: Sell 2 calls and sell 1 put with same strike and time to expiration.
Outlook: (1) Neutral to slightly bullish or slightly bearish but more fearful of the downside or (2) Expecting a decrease in implied volatility.
Directional Risk: Unlimited upside and downside.
Max gain: Premiums received for all options. Occurs if stock closes at strike price at expiration.
Max loss: Unlimited upside and downside.
Breakeven (2 breakeven points):
Upper: Strike price half the call and put premiums.
Lower: Strike price – the call and put premiums.

 Short Strap
 

Long Strangle
Position: Buy 1 low strike put and buy 1 high strike call.
Outlook: (1) Extremely bullish or bearish but uncertain of direction or
(2) Expecting an increase in implied volatility.
Directional Risk: None.
Max gain: Unlimited upside and downside.
Max loss: Premiums paid for both options. Occurs if stock stays between strikes at expiration.
Breakeven (2 breakeven points):
Upper: Call strike call and put premiums.
Lower: Put strike – call and put premiums.

 Long Strangle
 

Short Strangle
Position: Sell 1 low strike put and sell 1 high strike call.
Outlook: Neutral to slightly bullish or slightly bearish.
Directional Risk: Unlimited upside and downside.
Max gain: Premiums received from both options. Occurs if stock closes between strikes at expiration.
Max loss: Unlimited upside and downside.
Breakeven: (2 breakeven points):
Upper: Call strike call and put premiums.
Lower: Put strike – call and put premiums.

 ShortStrangle
 

Covered Call (Buy-Write)
Position: Buy stock and sell calls (equivalent contract amounts) against it.
Outlook: Neutral to slightly bullish.
Directional Risk: Unlimited downside.
Max gain: (2 possible)
(1) Time premium received from calls (occurs if call strike is less than or equal to stock purchase price). 
(2) Time premium received plus capital gain (occurs if call strike is higher than stock purchase price). Regardless of which strike is sold, the maximum gain occurs if the stock price is greater than the strike price at expiration.
Max loss: Stock price less the premium received from call (net cost to purchase the stock). Occurs at a stock price of zero.
Breakeven: Stock price less premium received.

 BuyWrite
 

Covered Put (Sell-Write)
Position: Short stock and sell puts (equivalent contract amounts) against it.
Outlook: Neutral to slightly bearish (may be slightly bullish is premium is big enough).
Directional Risk: Unlimited upside.
Max gain:
(1) Time premium received from puts (
occurs if stock price is less than or equal to the put strike at expiration). (2) Time premium received plus capital gain (occurs if call strike is lower than stock short sale price). 
Regardless of which strike is sold, the maximum gain occurs if the stock price is less than the strike price at expiration.
Max loss: Unlimited upside
Breakeven:
Short sale price plus put option premium received.

 Sell Write
 

Bull Spread
Position (Usually done with either all calls or all puts):
Calls (debit spread): Buy a low strike call and sell a higher strike call.
Puts (credit spread): Sell a high strike put and buy a lower strike put.
(Whether using calls or puts, you are always buying the low strike and selling the high strike.)
Outlook:Neutral to moderately bullish depending on how constructed.
Directional Risk: Limited downside.
Max gain:Calls: Difference in strike prices less debit.
Puts: Credit received
Regardless of whether call or puts are used, the max gain occurs if the stock price is greater than the higher strike price at expiration.
Max loss:Calls: Premium paid.
Puts: Difference in strikes less premium received.
Whether using calls or puts, the max loss occurs if the stock price is below the lower strike price at expiration.
Breakeven:Calls: Long call strike plus debit.
Puts: Credit received
Regardless of whether call or puts are used, the max gain occurs if the stock price is greater than the higher strike price at expiration.
Max loss:
Calls: Premium paid.
Whether using calls or puts, the max loss occurs if the stock price is below the lower strike price at expiration.
Breakeven:Calls: Long call strike plus debit.
Puts: High strike put less premium received. 

 Bull Spread
 

Bear Spread
Position (usually done with either all calls or all puts):
Calls (credit spread): Sell a low strike call and buy a higher strike call.
Puts: (debit spread): Buy high strike put and sell a lower strike put.
Outlook:Neutral to moderately bearish depending on how constructed.
Directional Risk: Limited upside.
Max gain: Calls: Credit received.
Puts: Difference in strike prices less debit.
Max loss:Calls: Difference in strikes less premium received.
Puts: Premium paid
Whether using calls or puts, the max loss occurs if the stock price is greater than the higher strike at expiration.
Breakeven:Calls: Short call strike plus premium received.
Puts: High strike put less premium received.

 BearSpread
 

Long Butterfly Spread
Position (usually done with either all calls or all puts):
Calls or Puts: Buy 1 low strike option, sell 2 medium strikes, and buy 1 high strike. All strikes should be equally spaced with same time to expiration.
Outlook: (1) Neutral but can be slightly bullish or slightly bearish depending on how constructed or (2) Expecting a rise in the skew curve.
Directional Risk: Limited upside and downside.
Max gain: Difference in middle strikes and one of the end strikes (also called the “wings”) less premium paid. Occurs if stock price equals center strike price at expiration.
Max loss: Premium paid. Occurs if stock closes above or below outer strikes (also called the “wings”) at expiration.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 LongButterfly
 

Short Butterfly Spread
Position (usually done with either all calls or all puts):
Calls or Puts: Sell 1 low strike option, buy 2 medium strikes, and sell 1 high strike. All strikes should be equally spaced with same time to expiration.
Outlook: (1) Moderately bullish or bearish or (2) Expecting a fall in the skew curve
Directional Risk: None.
Max gain: Premium received. Occurs if the stock price is less than the lower strike or greater than the highest strike at expiration.
Max loss: Difference in middle strikes and end strikes (also called the “wings”) less premium paid. Occurs if stock closes at center strike price at expiration.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 ShortButterfly
 

Long Condor Spread
Position (usually done with either all calls or all puts):
Calls or Puts: Buy 1 low strike option, sell 2 successively higher strikes, and buy 1 at an even higher strike. All strikes should be equally spaced with same time to expiration.Outlook: Neutral to slightly bullish or bearish depending on how constructed or (2) Expecting a rise in the skew curve.
Directional Risk: None.
Max gain: Difference in two middle strikes (or any two successive strikes) less premium paid. Occurs if stock closes between middle strike prices at expiration.
Max loss: Premium paid.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 Long Condor
 

Short Condor Spread
Position (usually done with either all calls or all puts).
Calls or Puts: Sell 1 low strike option, buy 2 successively higher strikes, and sell 1 higher strike.
All strikes should be equally spaced with same time to expiration.
Outlook: Moderately bullish or bearish depending on how constructed or (2) Expecting a fall in the skew curve.
Directional Risk: None.
Max gain: Premium received. Occurs if the stock price is less than the lowest strike or greater than the highest strike at expiration.
Max loss: Difference in two successive strikes less premium received. Occurs if the stock price is between the two middle strikes at expiration.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 SHort Condor
 

Long Albatross Spread
Position (usually done with either all calls or all puts).
Calls or Puts: Buy 1 low strike option, sell 1 higher strike, skip a strike and sell the next higher strike, and buy 1 higher strike. All strikes should be equally spaced with same time to expiration.
Outlook: Neutral to moderately bullish or bearish depending on how constructed.
Directional Risk: Limited upside and downside.
Max gain: Difference in first two (or last two strikes) less premium paid. Occurs if stock price is less than the lowest strike or greater than the highest strike at expiration.
Max loss: Premium paid.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 Long Albatross
 

Short Alabatross Spread
Position (usually done with either all calls or all puts).
Calls or Puts: Sell 1 low strike option, buy 1 higher strike, skip a strike and buy the next higher strike, and sell 1 higher strike. All strikes should be equally spaced with same time to expiration.
Outlook: (1) Extremely bullish or bearish or (2) Expecting a fall in the skew curve.
Directional Risk: None.
Max gain: Credit received.
Max loss: Difference in two lowest (or two highest) strikes less premium. Occurs if the stock price
is between the two center strikes at expiration.
Breakeven (2 breakeven points):
Lower: Low strike premium
Upper: High strike – premium

 ShortAlbatross
 

Call Backspread (Long Call Ratio Spread)
Position: Short low strike call and long more contracts of a higher strike call.
Outlook: Extremely bullish but also fearful of a downside move.
Directional Risk: Limited downside if debit spread (none if credit spread).
Max gain: Unlimited.
Max loss: Per spread, the maximum loss is the difference in strikes the debit amount (or minus the credit if trade executed for a credit). Occurs if the stock price equals the strike price of the long calls.
Breakeven (2 possible breakeven points):
If trade executed for a debit there is one breakeven point:
Long call strike 1/(R-1) * max loss; where R is the ratio of long calls to short calls (R must be 2 or greater).
If trade executed for a credit, there will be two breakeven points:
Lower: Short strike plus credit.
Upper: Same calculation is used as for debit spread

 Call Backspread
 

Short Call Ratio Spread
Position: Long low strike price call and short more contracts of a higher strike call.
Outlook: Slightly bullish but fearful of downturn.
Directional Risk: Unlimited upside. Limited downside if debit spread (none if credit spread).
Max gain: Limited. Occurs if the stock price equals the strike of the short calls at expiration. The max gain is the difference in strikes less the debit paid (or plus the credit received).
Max loss: Unlimited upside.
Breakeven (2 possible breakeven points):
If trade executed for a credit, there is one breakeven point: Short call strike 1/(R-1) * max gain; where R is the ratio of short calls to long calls (R must be greater than 2).
If trade executed for a debit there will be two breakeven points:
Lower: Strike of the short call debit
Upper: Same calculation is used as for credit spread
The formula for the lower breakeven will not change regardless of the number of short calls. This is because the slope of the profit and loss chart is only affected to the right (upper breakeven) of the short strike as shown in the profit and loss diagram above.

 ShortRatioCall
 

Put Backspread (Long Put Ratio Spread)
Position: Short a high strike put and long more contracts of a lower strike put.
Outlook: Extremely bearish but fearful of an upward move.
Directional Risk: Limited upside if debit spread (none if credit spread).
Max gain: Strike price of the long less debit (or plus credit). Occurs at a stock price of zero.
Max loss: Limited. Occurs if the stock price equals the strike of the long position at expiration.
Max loss is difference in strikes plus the debit amount (or less the credit amount).
Breakeven (2 possible breakeven points):
If trade executed for a debit, there is one breakeven point: Long put strike – 1/(R-1) * max loss; where R is the ratio of long puts to short puts (R must be greater than or equal to 2).
If trade executed for a credit, there will be two breakeven points:
Lower: Same calculation is used as for debit spread
Upper: Short strike – credit

 PutBackspread
 

Short Put Ratio Spread
Position: Long a high strike put and short more contracts of a lower strike put.
Outlook: Neutral to slightly bearish but fearful of upward move.
Directional Risk: Unlimited downside
Max gain: Limited. Occurs if the stock price equals the strike of the short puts at expiration. Max gain is difference in strike less debit (or plus credit).
Max loss: Max loss is difference in strikes plus the debit amount (or less the credit amount).
Breakeven (2 possible breakeven points):
If trade executed for a credit, there is one breakeven point: Short put strike – 1/(R-1) * max gain; where R is the ratio of short puts to long puts (R must be 2 or greater). Example: Buy 1 $50 put for $3 and sell 2 $45 puts for $2 for net credit of $1. There are twice as many puts purchased so R = 2. Because the max gain is $6, the breakeven is $45 – 1/(2-1) * $6 = $39.
If trade executed for a debit, there will be two breakeven points:
Lower: Same calculation is used as for credit spread
Upper: Long strike – debit

 Short PutRatio
 

Long Call Christmas Tree
Position: Short 1 lower strike call and long 1 contract of a higher strike call and long 1 more call at an even higher strike.
Outlook: Extremely bullish but fearful of a downward fall.
Directional Risk: Limited downside if debit spread (none if credit spread).
Max gain: Unlimited upside.
Max loss: Limited. Occurs if stock closes between strikes of two long positions at expiration.
If executed for credit: Max loss is difference between short strike and first long strike minus credit.
If executed for debit: Max loss is difference between short strike and first long strike plus debit.
Breakeven (2 possible breakeven points):
If trade executed for a debit, there is one breakeven point: Highest strike plus max loss.
If executed for a credit there will be two breakeven points:
Upper breakeven is same as for debit.
Lower breakeven will be the short strike credit.

 LongCallXmas
 

Short Call Christmas Tree
Position: Long low strike call and short 1 higher strike call and short 1 call at an even higher strike.
Outlook: Neutral but fearful of downturn.
Directional Risk: Unlimited upside.
Max gain: Limited. Max gain is difference in long and first short strike plus credit (or minus debit). Occurs if stock closes between two short strikes at expiration.
Max loss: Unlimited upside.
Breakeven (2 possible breakeven points):
If trade executed for a credit, there is one breakeven point: Highest strike plus max gain.
If trade executed for a debit, there are two breakeven points:
Upper: Same as for credit
Lower: Long strike plus debit

 ShortCallXmas
 

Long Put Christmas Tree
Position: Short 1 high strike put and long 1 contract of a lower strike put and long 1 more put at an even lower strike.
Outlook: Extremely bearish but fearful of an upward move.
Directional Risk: Limited upside if executed for debit (none if executed for credit).
Max gain: Lowest strike put minus max loss.
Max loss: Limited. Occurs if stock closes between strikes of two long positions at expiration.
If executed for debit: Max loss is difference between short strike and first long strike plus debit.
If executed for credit: Max loss is difference between short strike and first long strike minus credit.
Breakeven (2 possible breakeven points):
If trade executed for a debit, there is one breakeven point:
Breakeven = Lowest strike minus max loss.

 LongPutXmas
 

Short Put Christmas Tree
Position: Long high strike put and short a lower strike put and short a put at an even lower strike.
Outlook: Neutral to slightly bearish but fearful of an upward move.
Directional Risk: Unlimited downside.Max gain: Limited. Max gain is difference in long and first short strike plus credit (or minus debit). Occurs if stock closes between two short strikes at expiration.
Max loss: Low strike put minus max gain. Occurs at a stock price of zero.
Breakeven (2 possible breakeven points):
If trade executed for a credit, there is one breakeven point:
Breakeven = Low strike minus max gain.

 ShortPutXmas
 

Long Semifuture
Position: Long high strike call and short a lower strike put.
Outlook: Very bullish. The sale of the put reduces the cost of the call but also exposes the trader to unlimited downside risk.
Directional Risk: Unlimited downside.
Max gain: Unlimited.
Max loss: Put strike plus debit (or minus credit). Occurs at a stock price of zero.
Breakeven (2 possible breakeven points):
If trade executed for a credit:
Breakeven = Put strike minus credit

 LongSemifuture
 

Short Semifuture
Position: Long low strike put and short a higher strike call.
Outlook: Extremely bearish. The sale of the call reduces the cost of the put but also exposes the trader to unlimited upside risk.
Directional Risk: Unlimited upside.
Max gain: Put strike minus debit (or plus credit). Occurs at a stock price of zero.
Max loss: Unlimited upside.
Breakeven (2 possible breakeven points):
If trade executed for a credit:
Breakeven = Call strike plus credit.

 ShortSemiFutre
 

Long Wrangle
Position: Long call backspread and long put backspread.
Outlook: (1) Extremely bullish or bearish but uncertain of direction or (2) Expecting an increase in implied volatility.
Directional Risk: None.
Max gain: Unlimited upside and downside.
Max loss: Net debit + difference in strikes. Occurs if stock closes between the strikes at expiration.
Breakeven (2 breakeven points):
Lower = Low strike minus max loss
Upper = High strike plus max loss

 Long Wrangle
 

Short Wrangle
Position: Short call ratio spread and short put ratio spread.
Outlook: Neutral to slightly bullish or bearish.
Directional Risk: Unlimited in both directions.
Max gain: Initial credit + difference in strikes. Occurs if stock closes between strikes at expiration.
Max loss: Unlimited upside and downside.
Breakeven (2 breakeven points):
Lower = Low strike minus max gain
Upper = High strike plus max gain

 Short Wrangle
 

Long Cartwheel
Position: Long call backspread and short put ratio spread.
Outlook: Extremely bullish to slightly bearish.
Directional Risk: Unlimited downside.
Max gain: Unlimited at extreme upside (above upper breakeven). Max gain at low strike (upper peak) = Difference in strikes + credit (or minus debit).
Max loss: Unlimited at extreme downside (below lower breakeven). Max loss at high strike (lower peak) =
Credit – difference in strikes (or debit + difference in strikes).
Breakeven (3 breakeven points):
Lower = Low strike – max gain at low strike
Middle = Low strike + 1/2 max gain at low strike
Upper = High strike plus max loss at high strike

 Long Cartwehee
 

Short Cartwheel
Position: Long put backspread and short call ratio spread.
Outlook: Extremely bearish to slightly bullish.
Directional Risk: Unlimited upside.
Max gain: Unlimited at extreme downside. Occurs at a stock price of zero. Max gain at high strike (upper peak) = Difference in strikes + credit (or minus debit).
Max loss: Unlimited at extreme upside (above upper breakeven). Max loss at low strike (lower peak) = Credit – difference in strikes (or debit + difference in strikes).
Breakeven (3 breakeven points):
Lower= Low strike – max loss at low strike
Middle = Low strike + 1/2 max loss at low strike
Upper= High strike plus max gain at high strike

 Short Cartwheel

Long Calendar Spread
Position: (Can be initiated with either either calls or puts).
Long a far month contract and short a shorter-term contract with equal strike prices.
Outlook: Neutral
Directional Risk: Limited upside and downside.
Max gain: Limited – assuming the positions are closed together at expiration of short strike. Occurs if stock closes at strike price of near-term contract at expiration. Difficult to say exactly what the max gain will be as the position is an attempt to exploit time decay and other factors will move as well.
Max loss: Limited to the net debit. Occurs if: (1) Stock closes below strike through both option expirations or (2) If stock makes a large move up or down prior to expiration of near-term strike.
Another scenario may happen: If the trader initiates the position and the stock makes a large move upward prior to January expiration, then both options will converge on intrinsic values and lose nearly all of their time premiums. The same is true if the stock collapses. In either case, the trader may lose the entire net debit.
Of course, if the stock collapses during the short-term contract and the position is nearly worthless, one choice for the trader is to close out the short and hold onto the long hoping for a rebound. The trader does not have this choice if the stock makes a large move upward since the short position will exercise and the trader will usually cover with the long position.
Breakeven:Strike price net debit.

LongCalendar

Short Calendar Spread
Position: (Can be initiated with either calls or both puts).
Buy a short-term contract and sell a longer-term contract with equal strike prices.
Outlook: Very bullish or bearish
Directional Risk: None
Max gain: Limited to net credit (usually slightly less). Occurs if stock closes well above or well below the strike at expiration of the near-term contract.
Max loss: Difficult to say exactly what the max loss will be as the position is an attempt to exploit time decay and other factors will move as well. Once the long position expires (short-term contract), the volatility (and skew) will dictate the price of the short position, which determines the potential loss.
Another scenario may happen: The stock may close at exactly the strike and January expiration. In this case, the long call is worthless and the trader must buy back the short call to close out the position. However, there is no way to determine what the market will be asking for this contract and thus no sure way to determine what the loss, if any, will be.
Breakeven:For the reason stated in the paragraph above, it is impossible to say where the breakeven points will be.

SHortCallendar