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This chapter is from the book

Memory Tips for Long and Short Calls and Puts

Step 1: Remember your basic math at school:

+ +

=

+

+ -

=

-

- +

=

-

- -

=

+

Step 2: Think buying something as a + and selling something as a –, therefore:

Buying a call would be a + +

Selling a call would be a - +

Buying a put would be a + -

Selling a put would be a - -

Step 3: Remember your risk profiles:

Where you end up with a + risk profile, the diagonal line will be upward from left to right.

Where you end up with a - risk profile, the diagonal line will be downward from left to right.

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