518A COMPleTe gUIde TO THe FUTUreS MArKeT
 tabLe 35.9     profit/Loss Calculations: bullish “texas Option hedge” (Long Futures + Long Call)  
(1) (2) (3) (4) (5) (6)
Futures price at 
expiration ($/oz)
premium of august 
$1,200 Call at 
Initiation ($/oz)
$ amount of 
premium paid
profit/Loss on Long 
Futures position
Call Value at 
expiration
profit/Loss on 
position [(4)+(5)–(3)]
1,000 38.8 $3,880 –$20,000 $0 –$23,880
1,050 38.8 $3,880 –$15,000 $0 –$18,880
1,100 38.8 $3,880 –$10,000 $0 –$13,880
1,150 38.8 $3,880 –$5,000 $0 –$8,880
1,200 38.8 $3,880 $0 $0 –$3,880
1,250 38.8 $3,880 $5,000 $5,000 $6,120
1,300 38.8 $3,880 $10,000 $10,000 $16,120
1,350 38.8 $3,880 $15,000 $15,000 $26,120
1,400 38.8 $3,880 $20,000 $20,000 $36,120
    FIGURE   35.9    Profi  t/loss Profi  le: Bullish “T exas Option Hedge” (long Futures + long Call) 
Price of August gold futures at option expiration ($/oz)
Futures price at time of position
initiation and strike price
Breakeven price = $1,219.40
Profit/loss at expiration ($)
1,000
37,500
50,000
25,000
−25,000
−37,500
12,500
−12,500
0
1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400
Long 2 futures
Long futures + long call