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Read the two quantities
A call with strike 100 and paid premium 6 is evaluated at terminal price 103. Its holder payoff is 3. Simple profit is 3−6 = −3. The option ends in the money, but the payoff has not recovered its cost.
Separate strike from profit boundary
With a positive paid call premium, zero simple profit is reached at terminal price 106. The payoff becomes positive above 100. Those are different boundaries because the premium remains part of the position record.
| Object | Boundary or amount |
|---|---|
| Positive call payoff | S > 100 |
| Zero simple profit | S = 106 |
| Payoff at S = 103 | 3 |
| Simple profit at S = 103 | −3 |
Name the simplification
Simple profit adds cash movements from different dates without funding or discounting them. A dated-value or actual net-return question needs another calculation. The label should remain attached to the number.
Keep settlement and premium directions aligned
A writer receives the premium and bears the negative holder payoff under this contract model. The two sides’ simple profits sum to zero when no separate costs are added. A quoted positive premium does not mean both sides pay it.