495
OPTION TrAdINg STrATegIeS
well prefer a long in-the-money call position to a long futures position combined with a protective 
sell stop order. In any case, the key point is that the trader who routinely compares the strategies 
of buying an in-the-money call versus going long futures with a protective sell stop should enjoy an 
advantage over those traders who never consider the option-based alternative. 
    FIGURE   35.3c    Profi  t/loss Profi  le: long Call (In-the-Money) 
Price of August gold futures at option expiration ($/oz)
Futures price at
time of position
initiationStrike price
Breakeven price = $1210.10
Profit/loss at expiration ($)
1,000
10,000
−10,000
−15,000
5,000
−5,000
0
15,000
20,000
1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400
 tabLe 35.3c     profit/Loss Calculations: Long Call (In-the-Money)  
(1) (2) (3) (4) (5)
Futures price at 
expiration ($/oz)
premium of august $1,100 
Call at Initiation ($/oz)
$ amount of 
premium paid
Call Value at 
expiration
profit/Loss on 
position [(4) – (3)]
1,000 110.1 $11,010 $0 –$11,010
1,050 110.1 $11,010 $0 –$11,010
1,100 110.1 $11,010 $0 –$11,010
1,150 110.1 $11,010 $5,000 –$6,010
1,200 110.1 $11,010 $10,000 –$1,010
1,250 110.1 $11,010 $15,000 $3,990
1,300 110.1 $11,010 $20,000 $8,990
1,350 110.1 $11,010 $25,000 $13,990
1,400 110.1 $11,010 $30,000 $18,990