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Payoff for Call Buyer Formula

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The Payoff for Call Buyer, also known as the long call position, refers to the profit or loss realized by the buyer of a call option at expiration, based on the price of the underlying asset. Check FAQs

PCB = max (0, S T - X)

PCB - Payoff for Call Buyer?S_T - Price of Underlying at Expiration?X - Exercise Price?

Payoff for Call Buyer Example

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Here is how the Payoff for Call Buyer equation looks like with Values.

Here is how the Payoff for Call Buyer equation looks like with Units.

Here is how the Payoff for Call Buyer equation looks like.

3 = max (0, 29 - 26)

3 = max (0, 29 - 26)

3 = max (0, 29 - 26)

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Payoff for Call Buyer Solution

Follow our step by step solution on how to calculate Payoff for Call Buyer?

FIRST Step Consider the formula

PCB = max (0, S T - X)

Next Step Substitute values of Variables

∴

PCB = max (0, 29 - 26)

Next Step Prepare to Evaluate

∴

PCB = max (0, 29 - 26)

LAST Step Evaluate

∴

PCB = 3

Payoff for Call Buyer Formula Elements

Variables

Functions

Payoff for Call Buyer

The Payoff for Call Buyer, also known as the long call position, refers to the profit or loss realized by the buyer of a call option at expiration, based on the price of the underlying asset.

Symbol: PCB

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Payoff for Call Buyer

Price of Underlying at Expiration

Price of Underlying at Expiration refers to the value of the underlying asset of a financial derivative, such as a stock, commodity, or currency, at the time the derivative contract expires.

Symbol: S_T

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Price of Underlying at Expiration

Exercise Price

The Exercise Price, also known as the strike price, is the predetermined price at which the owner of a financial derivative, such as an option or a warrant, can buy or sell the underlying asset.

Symbol: X

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Exercise Price

max

Maximum of a function is the highest value that the function can output for any possible input.

Syntax: max(a1, …, an)

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How to Evaluate Payoff for Call Buyer?

Payoff for Call Buyer evaluator uses Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price) to evaluate the Payoff for Call Buyer, The Payoff for Call Buyer formula is defined as the long call position, refers to the profit or loss that the buyer of a call option realizes at expiration based on the price of the underlying asset. Payoff for Call Buyer is denoted by PCB symbol.

How to evaluate Payoff for Call Buyer using this online evaluator? To use this online evaluator for Payoff for Call Buyer, enter Price of Underlying at Expiration (S_T) & Exercise Price (X) and hit the calculate button.

FAQs on Payoff for Call Buyer

What is the formula to find Payoff for Call Buyer?

The formula of Payoff for Call Buyer is expressed as Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price). Here is an example- 3 = max(0,29-26).

How to calculate Payoff for Call Buyer?

With Price of Underlying at Expiration (S_T) & Exercise Price (X) we can find Payoff for Call Buyer using the formula - Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price). This formula also uses Maximum Value (max) function(s).

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Payoff for Call Buyer Formula

Payoff for Call Buyer Example

Payoff for Call Buyer Solution

Payoff for Call Buyer Formula Elements

Other formulas in Forex Management category

How to Evaluate Payoff for Call Buyer?

FAQs on Payoff for Call Buyer

Variable Name