Do I have to spend time understanding payoff graphs in options?

[sachin_patel]

Question is, as long as I understand the formulas, and I know which one is unlimited profit/loss, do I have to spend time in understanding and making sense out of graphs?

 

[S2000magician]

No, you don’t.
Just make sure that you’re completely honest with yourself when you say that you understand the formulae.

 

[sachin_patel]

Yes absolutely.. Thank you!

 

[S2000magician]

You’re welcome.

 

[sooraj]

If possible invest your time watching David Heatherington explaining the pay off diagrams - then you dont need the formulae or the book. You wouldnt need to even read the stuff again.

 

[sachin_patel]

Thanks Sooraj.. I’ll give it a try.

 

[cgottuso8190]

I didn’t memorize formulae or payoff diagrams at L3. If you understand how each position profits/loses, you can easily just think through a bull spread or a straddle.