| Covered call, stock at $100, call sold at $105 | What we drew | What it is |
|---|---|---|
| Maximum profit | $323 | $677 |
| The difference | — | twice the premium collected |
Arithmetic from the specification stated on the page: a hundred shares bought at $100, one call sold at $105, 45 days, 25% volatility. Not a measured result.
By an assertion that had nothing to do with covered calls: the profit and loss at entry, at the price you entered at, must be exactly zero.
No. It was an illustrative chart, drawn from a stated specification. No test on this site has published a result of any kind.
Because shares have no strike and no expiry, so they cannot be priced the way an option is. The special case was necessary; subtracting the premium in it was not.
That the position's profit and loss, evaluated at the price you opened at, on the day you opened it, is zero. It runs on every structure the engine builds.
It was the only structure with a share leg, so no. But the assertion now runs on all of them, which is the part that generalises.
The special case was deleted. Shares contribute zero at entry by construction, so they need no adjustment at all.
Every structure the engine builds now asserts that entry profit and loss is zero before it can draw anything. If that check fails, no chart is produced.
