539
OPTION TrAdINg STrATegIeS
 tabLe 35.20a      profit/Loss Calculations: bull put Money Spread (Long put with Lower Strike price/
Short put with higher Strike price); Case 1—both puts In-the-Money  
(1) (2) (3) (4) (5) (6) (7) (8)
Futures price 
at expiration 
($/oz)
premium of 
august $1,250 
put ($/oz)
$ amount 
of premium 
paid
premium of 
august $1,300 
put ($/oz)
$ amount 
of premium 
received
$1,250 put 
Value at 
expiration
$1,300 put 
Value at 
expiration
profit/Loss on 
position
[(5) − (3) + (6) −(7)]
1,000 68.7 $6,870 108.7 $10,870 $25,000 $30,000 –$1,000
1,050 68.7 $6,870 108.7 $10,870 $20,000 $25,000 –$1,000
1,100 68.7 $6,870 108.7 $10,870 $15,000 $20,000 –$1,000
1,150 68.7 $6,870 108.7 $10,870 $10,000 $15,000 –$1,000
1,200 68.7 $6,870 108.7 $10,870 $5,000 $10,000 –$1,000
1,250 68.7 $6,870 108.7 $10,870 $0 $5,000 –$1,000
1,300 68.7 $6,870 108.7 $10,870 $0 $0 $4,000
1,350 68.7 $6,870 108.7 $10,870 $0 $0 $4,000
1,400 68.7 $6,870 108.7 $10,870 $0 $0 $4,000
    FIGURE   35.20a   
 Profi  t/loss Profi  le: Bull Put Money Spread (long Put with lower Strike Price/
Short Put with Higher Strike Price); Case 1—Both Puts In-the-Money 
Price of August gold futures at option expiration ($/oz)
Profit/loss at expiration ($)
1,000
3,750
5,000
2,500
0
1,250
1,050 1,100 1,150 1,200 1,250
Breakeven price
= $1,260
1,300 1,350 1,400
−1,250
Futures price at time
of position initiation