This form is a sample letter in Word format covering the subject matter of the title of the form.
This form is a sample letter in Word format covering the subject matter of the title of the form.
The payoff ratio, also known as the profit factor is a metric that compares the average profit of winning trades to the average loss of losing trades. It helps traders assess the performance of their trading strategies and the potential profitability of their trades.
Futures trading profits can be classified and are subject to a key tax advantage called the 60/40 tax rule. This rule taxes 60 percent of profits from qualifying futures contracts at the lower long term capital gains rate but the rest of the 40 percent at the higher short term rate.
The expected payoff is the average of the payoffs, weighted by the probabilities of each payoff, i.e., 0.4 200 + 0.6 500 = 380.
A put payoff diagram explains the profit/loss from the put option on expiration and the breakeven point of the transaction. It's a pictorial representation of the possible results of your action (of buying a Put).