A graphical representation of the potential outcomes of a strategy. Dollars of profit or loss are graphed on the vertical axis, and various stock prices are graphed on the horizontal axis. Results may be depicted at any point in time, although the graph usually depicts the results at expiration of the options involved in the strategy.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A chart plotting the potential profits or losses from an option strategy. On a profit graph, the x-axis represents different prices for the underlying asset and the y-axis represents the profit or loss that will result from the option being exercised at a given price.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved