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Read the plotted horizontal interval
The original tool displays a finite set of hypothetical terminal prices. It can show a short call from price zero to twice the strike. That endpoint is a presentation choice, not a contractual limit on the underlying.
Evaluate an additional scenario algebraically
For a one-unit short call with strike 100 and premium 6, simple profit at S=200 is 6−100=−94. At S=300 it is 6−200=−194. The larger loss is outside a 0-to-200 chart but remains part of the model function.
| Terminal price | Simple writer profit |
|---|---|
| 200 | −94 |
| 300 | −194 |
Use the formula to establish a theoretical bound
A naked short call keeps losing as nonnegative S increases without an upper bound in this model. By contrast, a bounded compatible spread can have a cap derived from its leg subtraction. The cap comes from the expression, not the image edge.
State what the chart represents
The payoff plot is a scenario aid. It assigns no probability and does not compute margin or execution limits. Its finite displayed range should not be described as a complete worst-case loss calculation.