neutral-to-bullish strategy and consists of selling a put option against a stock. The naked put profit/loss profile is similar to the covered call (see above) profit/loss profile. The naked put generally requires less in brokerage fees and commissions than the covered call. The following return calculation assumes the sold put option is out-of-the-money and the price of the stock at expiration is greater than the put strike price at option expiration: Naked Put Potential Return = (put option price) / (stock strike price - put option price) For example, for a put option sold for $2 with a strike price of $50 against stock LMN the potential return for the naked put would be: Naked Put Potential Return = 2/(50.0-2)= 4.2% The break-even point is the stock strike price minus the put option price. Break-even = $50 – $2.00 = $48.00 As long as the price of the LMN stock is greater than $48 at stock option expiration, the position will be profitable. Below a LMN stock price of $48, the position is unprofitable. Calendar call return The calendar call spread (see calendar spread) is a bullish strategy and consists of selling a call option with a shorter expiration against a purchased call option with an expiration further out in time. The calendar call spread is basically a leveraged version of the covered call (see above), but purchasing long call options instead of purchasing stock. % Assigned Return = (long call value - net debit) / (net debit) % Unchanged Return = [long call value (at short-term exp. w/ current stock price) - net debit] / (net debit) For example, consider stock OPQ at $49.31 per share. Buy JAN 1 Year Out 40 strike call for $13.70 and write (Sell) the Near Month 55 strike call for $0.80 Net debit = $13.70 - $0.80 = $12.90 % Assigned Return = (17.90 - 12.90) / (13.70 - 0.80) = 5.00 / 12.90 = 38.8% % Unchanged Return = [13.02 - 12.90] / 12.90 = .68 / 12.90 = 1.0% Long straddle return The long straddle (see straddle) is a bullish and a bearish strategy and consists of purchasing a put option and a call option with the same strike prices and expiration. The long straddle is profitable if the underlying stock or index makes a movement upward or downward offsetting the initial combined purchase price of the options. A long straddle