Do we need to remember all the formulas for options? Payoff, profit, maximum/minimum loss, break even points… etc… for all option strategies?
It’s time consuming to derive those in exam conditions.
Those are pretty intuitive - those formulas are not the ony way to get the right answer. However, if you’re really bad with a calculator or at identifying the appropriate inputs, but really good at memorizing formulas, I’d imagine putting down some of the formulas will score you partial credit. I just plan to work through each position separately (i.e. butterfly call spread - work through the payoff for the long calls and the short calls, all separately).
ok thanks for your feedback. i did try to work it when doing mocks, but it very time consuming. i think i will try a combination of both. memorise and if i forgot, derive it.