Options

Payoff Diagram

A chart showing an Option position's profit or loss across a range of underlying prices at expiry — a Call buyer's has a distinctive "hockey stick" shape.

A payoff diagram is a chart plotting an Option position’s profit or loss (y-axis) against the underlying’s price at expiry (x-axis). A Call option buyer’s payoff diagram has a distinctive “hockey stick” shape — a flat, capped loss below the strike, followed by a rising, theoretically unlimited profit line above the breakeven point.

See a full payoff diagram and worked example in What Is a Call Option? Buying Explained With Example.