Part 1 Support ans Resistance

Payoff Diagrams (Understanding Profits & Losses)

Options are best understood with payoff diagrams.

Call Buyer → Loss limited to premium, profit unlimited.

Put Buyer → Loss limited to premium, profit grows as price falls.

Call Seller → Profit limited to premium, risk unlimited.

Put Seller → Profit limited to premium, risk high if price falls.

Common Option Strategies

Beginners usually just buy Calls or Puts. But professionals use strategies combining multiple options:

Covered Call → Hold stock + Sell Call to earn income.

Protective Put → Hold stock + Buy Put for protection.

Straddle → Buy Call + Buy Put (bet on big movement either way).

Strangle → Similar to Straddle but strikes are different.

Iron Condor → Sell both Call & Put spreads (profit if market stays flat).