What is whole-position terminal P/L at QLT 110.00, before costs?
Reveal the worked answer
$100.00
Use all signed legs, not just the winning leg. The popup and graph use the same ticket.
Advanced Options · ADV-03a · Advanced
Long strangle
How does long strangle express a large movement beyond an initial interval view?
What you will learn and prerequisites
- Read and reconstruct the priced ticket.
- Reconcile leg P/L with the combined graph.
- Explain the time, volatility and operational failure cases.
Read first: Read a contract and its premium, Rights, obligations and expiration, Defined payoff risk is not margin, Read the whole multi-leg ticket
A long strangle buys downside and upside rights at different strikes. It can cost less than a comparable straddle because neither wing starts at the center. The saving comes with a wider region where both options can expire worthless.
Construction: read every leg
Buy the 95 put and 105 call for 2.00 each. Debit is 400. Between 95 and 105 terminal P/L is flat at −400. Breakevens are 91 and 109. The flat center is the key geometric difference from a same-strike straddle.
Read the ticket before the graph
BUY means you own an option right; SELL means you accept a short-option obligation. Positive quantities are long and negative quantities are short in the calculation. Check quantity, call/put, strike, multiplier and expiry before netting premium.
All legs in this example share November 20, 2026 expiration. The entry observation is October 6, 2026, with fictional QLT at 100. These are independent illustrative premiums, not a current option chain or executable quotes. The terminal diagram assumes every leg and any shares are resolved at one common settlement price.
Before expiry: time and volatility
The position generally owns Gamma and Vega, but small center moves may create little Delta. Each wing's sensitivity changes as it becomes relevant. A favorable spot move can still be outweighed by IV contraction and time.
Manage the position deliberately
Choose wing distance from the expected magnitude and timing, not affordability alone. After a catalyst, reassess what uncertainty remains. Closing the winning wing and holding the other is a separate decision, not automatically good management.
Fictional teaching ticket · no order submission
Long strangle
QLT • reference spot $100 • independent illustrative prices • quote date 2026-10-06
| Action | Qty | Type | Strike | Expiry | Premium/unit | Multiplier |
|---|---|---|---|---|---|---|
| BUY | 1 | Put | 95 | 2026-11-20 | 2 | 100 |
| BUY | 1 | Call | 105 | 2026-11-20 | 2 | 100 |
Opening option cash (+received / −paid)-400 USD
Entry option fees in cost variant1.3 USD
Shares included0
| Measure | Before costs | After stated entry fees |
|---|---|---|
| Maximum terminal profit | Unbounded in this terminal model | Unbounded in this terminal model |
| Maximum terminal loss magnitude | 400 | 401.3 |
| Breakeven settlement price(s) | 91, 109 | 90.987, 109.013 |
This is a mathematical expiry experiment using the displayed legs, not an executable quote. The slider range is not a risk limit.
$0.65 per option contract on entry only. No exit, assignment, financing or tax costs modeled.
Independent fictional premiums, not one simultaneous arbitrage-consistent chain. All legs realized simultaneously at intrinsic at the same expiry; terminal calculations do not model American early exercise, temporary unhedged positions, forced liquidation or live liquidity. Displayed chart domain is not a tail-risk cap.
From opening cash to a settlement result
Read the opening instructions: buy 1 95 put at 2.00; buy 1 105 call at 2.00. Option opening cash is $400.00 paid as a debit. A received credit is not earned profit while the obligation remains open.
Set the common settlement price to 110.00. Calls have intrinsic value max(S−K,0); puts have max(K−S,0). Subtract the opening premium from each intrinsic value, then multiply by signed quantity and the 100-unit multiplier. Shares contribute their price change from their own cost. The calculation popup shows every leg.
The combined result is $100.00 before costs and $98.70 after illustrative opening fees of $1.30. Exit fees, slippage, funding, dividends and taxes are not included. Opening fees are 0.65 per option contract, not a statement of any broker's pricing.
Maximum terminal profit is unbounded in this model; maximum terminal loss magnitude is $400.00, before costs. Isolated zero-P/L settlement points in the model: 91, 109. Move the scenario slider across each strike and explain why the slope changes there. A strike is a contract threshold, not a prediction.
This terminal model is useful for comparing risk shapes, but actual American-style assignment, share delivery, forced liquidation or a failed multi-leg exit can produce a different path. A long protective leg is not an automatic instruction that a broker must exercise it when another leg is assigned.
Open the calculation without leaving this lesson
The whole ticket at common expiry
Vertical: P/L per complete ticket (USD)
Horizontal: Underlying settlement price (USD)
1. Combined terminal P/L before fees2. Combined terminal P/L after entry fees
See the individual legs behind the combined curve
1. Combined terminal P/L before fees2. Combined terminal P/L after entry fees3. Leg 1: BUY 1 95 put4. Leg 2: BUY 1 105 call
Read the graph as a data table
| Underlying settlement price (USD) | Combined terminal P/L before fees | Combined terminal P/L after entry fees | Leg 1: BUY 1 95 put | Leg 2: BUY 1 105 call |
|---|---|---|---|---|
| 80 | 1,100 | 1,098.7 | 1,300 | -200 |
| 80.5 | 1,050 | 1,048.7 | 1,250 | -200 |
| 81 | 1,000 | 998.7 | 1,200 | -200 |
| 81.5 | 950 | 948.7 | 1,150 | -200 |
| 82 | 900 | 898.7 | 1,100 | -200 |
| 82.5 | 850 | 848.7 | 1,050 | -200 |
| 83 | 800 | 798.7 | 1,000 | -200 |
| 83.5 | 750 | 748.7 | 950 | -200 |
| 84 | 700 | 698.7 | 900 | -200 |
| 84.5 | 650 | 648.7 | 850 | -200 |
| 85 | 600 | 598.7 | 800 | -200 |
| 85.5 | 550 | 548.7 | 750 | -200 |
| 86 | 500 | 498.7 | 700 | -200 |
| 86.5 | 450 | 448.7 | 650 | -200 |
| 87 | 400 | 398.7 | 600 | -200 |
| 87.5 | 350 | 348.7 | 550 | -200 |
| 88 | 300 | 298.7 | 500 | -200 |
| 88.5 | 250 | 248.7 | 450 | -200 |
| 89 | 200 | 198.7 | 400 | -200 |
| 89.5 | 150 | 148.7 | 350 | -200 |
| 90 | 100 | 98.7 | 300 | -200 |
| 90.5 | 50 | 48.7 | 250 | -200 |
| 91 | 0 | -1.3 | 200 | -200 |
| 91.5 | -50 | -51.3 | 150 | -200 |
| 92 | -100 | -101.3 | 100 | -200 |
| 92.5 | -150 | -151.3 | 50 | -200 |
| 93 | -200 | -201.3 | 0 | -200 |
| 93.5 | -250 | -251.3 | -50 | -200 |
| 94 | -300 | -301.3 | -100 | -200 |
| 94.5 | -350 | -351.3 | -150 | -200 |
| 95 | -400 | -401.3 | -200 | -200 |
| 95.5 | -400 | -401.3 | -200 | -200 |
| 96 | -400 | -401.3 | -200 | -200 |
| 96.5 | -400 | -401.3 | -200 | -200 |
| 97 | -400 | -401.3 | -200 | -200 |
| 97.5 | -400 | -401.3 | -200 | -200 |
| 98 | -400 | -401.3 | -200 | -200 |
| 98.5 | -400 | -401.3 | -200 | -200 |
| 99 | -400 | -401.3 | -200 | -200 |
| 99.5 | -400 | -401.3 | -200 | -200 |
| 100 | -400 | -401.3 | -200 | -200 |
| 100.5 | -400 | -401.3 | -200 | -200 |
| 101 | -400 | -401.3 | -200 | -200 |
| 101.5 | -400 | -401.3 | -200 | -200 |
| 102 | -400 | -401.3 | -200 | -200 |
| 102.5 | -400 | -401.3 | -200 | -200 |
| 103 | -400 | -401.3 | -200 | -200 |
| 103.5 | -400 | -401.3 | -200 | -200 |
| 104 | -400 | -401.3 | -200 | -200 |
| 104.5 | -400 | -401.3 | -200 | -200 |
| 105 | -400 | -401.3 | -200 | -200 |
| 105.5 | -350 | -351.3 | -200 | -150 |
| 106 | -300 | -301.3 | -200 | -100 |
| 106.5 | -250 | -251.3 | -200 | -50 |
| 107 | -200 | -201.3 | -200 | 0 |
| 107.5 | -150 | -151.3 | -200 | 50 |
| 108 | -100 | -101.3 | -200 | 100 |
| 108.5 | -50 | -51.3 | -200 | 150 |
| 109 | 0 | -1.3 | -200 | 200 |
| 109.5 | 50 | 48.7 | -200 | 250 |
| 110 | 100 | 98.7 | -200 | 300 |
| 110.5 | 150 | 148.7 | -200 | 350 |
| 111 | 200 | 198.7 | -200 | 400 |
| 111.5 | 250 | 248.7 | -200 | 450 |
| 112 | 300 | 298.7 | -200 | 500 |
| 112.5 | 350 | 348.7 | -200 | 550 |
| 113 | 400 | 398.7 | -200 | 600 |
| 113.5 | 450 | 448.7 | -200 | 650 |
| 114 | 500 | 498.7 | -200 | 700 |
| 114.5 | 550 | 548.7 | -200 | 750 |
| 115 | 600 | 598.7 | -200 | 800 |
| 115.5 | 650 | 648.7 | -200 | 850 |
| 116 | 700 | 698.7 | -200 | 900 |
| 116.5 | 750 | 748.7 | -200 | 950 |
| 117 | 800 | 798.7 | -200 | 1,000 |
| 117.5 | 850 | 848.7 | -200 | 1,050 |
| 118 | 900 | 898.7 | -200 | 1,100 |
| 118.5 | 950 | 948.7 | -200 | 1,150 |
| 119 | 1,000 | 998.7 | -200 | 1,200 |
| 119.5 | 1,050 | 1,048.7 | -200 | 1,250 |
| 120 | 1,100 | 1,098.7 | -200 | 1,300 |
The failure case
Settlement at 108 yields 300 intrinsic and loses 100 before costs. Farther wings can make a ticket cheap while making its required move implausible.
Check your understanding
Try the question before revealing its answer. These are reading checks, not trading certification or a site completion record.
Does a terminal loss bound guarantee every early-assignment or liquidation outcome?
Reveal the worked answer
No.
It describes the specified common-settlement payoff. Product rules, stock delivery, capital and execution still matter.
Explain the intended large movement beyond an initial interval exposure, each leg's obligation and the adverse price region before using the strategy name.
Sources, assumptions and downloadable script
External references support definitions and conventions. Worked scenarios and prose are original. No current quotes or dealer inventory are claimed.
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