Limited Profit

Limited profit refers to a strategy where the maximum return is capped regardless of how much the underlying asset moves. This is common in spreads, where the sold option limits the upside.

Traders accept this trade-off for reduced risk and lower capital requirements. It is a fundamental feature of many complex strategies.

Bear Call Spread
Unrealized P&L
Floating P&L
Break-Even Price
Take-Profit
Risk-Reward Ratio
Time Value
Realized P&L