Why you need the options Profit/Loss diagram?

Thank you guys for your continued support, we've received a lot of comments and feedbacks from different places regarding Options Analysis tool, here we would like to make a detailed introduction on the Combination P/L analysis particularly, because it's the most useful one when trading options combinations and we've spent great deal of time developing it and will continue to make it better.

As we all know, if you trade stock, your returns are linear with the stock price move. However, options returns are not necessarily linear with the stock. Especially when you trade a spread or combination of options, it can be difficult to understand all your potential profits and losses. You would have to aggregate the profits and losses at each stock price point for each option. This would be an extremely tedious task and is unreasonable.

A Profit/Loss diagram can help you visualize your risk and rewards at different stock prices at expiration. This allows you to see how much you can potenitally make or lose for different stock outcomes.

Therefore, we use a graphically generated Profit/Loss diagram in the Options Analysis page to quickly show you the profit or loss you would have at various stock price points.

Thanks @curtaincall  for sharing his straddle strategy analysis using Options Analysis tools.

Here is today's Options Montage report which monitored market data and provides a snapshot of noteworthy changes in stock and option volumes. From the "Options expected to have increasing volume" list,  Apple will probably be a nice pick (which just released blowout Q3 earnings with sales up 11% and a 4-1 stock split by August).

So lets say we have a strangle option from July 31 in $Apple (AAPL.US)$ with 28 days to go until expiration.

Look at the diagram below generated by moomoo options analysis tool for this strategy. The diagram will show you your profit and loss on the vertical axis at the various stock prices on the horizontal axis.