509
OPTION TrAdINg STrATegIeS
example . Sell August  $1,200  gold futures put at a premium of $38.70/oz ($3,870), with August gold 
futures trading at $1,200/oz. (See Table   35.6   a and Figure   35.6   a.)   
Price of August gold futures at option expiration ($/oz)
Futures price at time
of position initiation
Short futures
At-the-money put
(strike price = $1,200)
Out-of-the-money put
(strike price = $1,100)
In-the-money
put (strike price = $1,300)
Price/loss at expiration ($)
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
    FIGURE   35.5d    Profi  t/loss Profi  le: Short Futures and long Put Comparisons (In-the-Money, 
At-the-Money, and Out-of-the-Money) 
 tabLe 35.6a     profit/Loss Calculations: Short put (at-the-Money)  
(1) (2) (3) (4) (5)
 Futures price at 
expiration ($/oz) 
 premium of august $1,200 
put at Initiation ($/oz) 
 $ amount of 
premium received 
 put Value at  
expiration 
 profit/Loss on 
position [(3) – (4)] 
1,000 38.7 $3,870 $20,000 –$16,130
1,050 38.7 $3,870 $15,000 –$11,130
1,100 38.7 $3,870 $10,000 –$6,130
1,150 38.7 $3,870 $5,000 –$1,130
1,200 38.7 $3,870 $0 $3,870
1,250 38.7 $3,870 $0 $3,870
1,300 38.7 $3,870 $0 $3,870
1,350 38.7 $3,870 $0 $3,870
1,400 38.7 $3,870 $0 $3,870