This is a basic profit/loss chart. There is a corresponding chart for any trade that can be made on the market. The basic idea is that anywhere that the blue line is above $0 there is profit to be made in selling the position. Correspondingly when the blue line is below $0 you will take a loss to sell the position. In this case any selling price for the position outside of the $23 to $27 range nets the investor a profit. This however does not include any costs incurred in actually performing the trade such as brokerage fees.
Some trades especially multiple leg options trades can be difficult to analyze but with the help of a simple profit/loss chart the position becomes much easier to understand. I suggest looking at some basic profit/loss chart profiles when trying to understand different strategies for investing.
Sorry for the delayed post but it has been a busy couple of weeks.
CoffieGuy
