EXHIBIT 1.1 Long Intel call.
Exhibit 1.1 is an at-expiration diagram for the Intel 22.50 call. It shows
the profit and loss, or P&(L), of the option if it is held until expiration. The
X-axis represents the prices at which INTC could be trading at expiration.
The Y-axis represents the associated profit or loss on the position. The at-
expiration diagram of any long call position will always have this same
hockey-stick shape, regardless of the stock or strike. There is always a limit
of loss, represented by the horizontal line, which in this case is drawn at
−0.85. And there is always a line extending upward and to the right, which
represents effectively a long stock position stemming from the strike.
The trade-offs between a long stock position and a long call position are
shown in Exhibit 1.2 .