What is a BOX?
Sell 1 lower strike OTM PUT
Buy same lower strike ITM Call
Buy 1 higher strike ITM PUT
Sell same higher strike OTM Call
In the pay-off graph above, the price of the underlying asset (Nifty) is plotted in the X-Axis and the profit/loss is plotted in the Y-Axis.
The black line with dots indicates the profit or loss at different prices of the underlying asset.
The region shaded in green indicates profitable zone and the region shaded in grey indicates loss zone.
A positive number (75 = Buy 1 lot) in the Quantity column indicates a Buy position and a negative number (-75 = Sell 1 lot) indicates a Sell position.