fix(api): scale covered-call premium to the 100-share contract (#32)#39
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fix(api): scale covered-call premium to the 100-share contract (#32)#39bradsmithmba wants to merge 1 commit into
bradsmithmba wants to merge 1 commit into
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_create_covered_call() added a per-share option premium to 100-share dollar
quantities:
max_profit = premium + (strike - current_price) * 100
max_loss = (current_price * 100) - premium
premium is per share, while the other terms are totals for the 100 shares a
covered call is written against, so both figures were off by premium * 99.
For premium=$2.50, strike=$105, price=$100 the old code reported max_profit
$502.50 and max_loss $9,997.50 instead of $750 and $9,750.
Scale the premium to the contract so all terms are total dollars:
max_profit = (premium + strike - current_price) * 100
max_loss = (current_price - premium) * 100
Closes cloudtrainerwork#32
Co-Authored-By: Claude Opus 4.8 <noreply@anthropic.com>
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Summary
_create_covered_call()added a per-share option premium to 100-share dollar quantities:The premium is per share; the other terms are totals for the 100 shares a covered call is written against. Both figures were therefore off by
premium * 99.Closes #32.
Example (premium=$2.50, strike=$105, price=$100)
Fix
Interaction with #13 (PR #29)
PR #29 changed this strategy's
profit_risk_ratiotomax_profit / max_loss. This PR fixes themax_profit/max_lossinputs that ratio consumes. They touch different lines in the same function and merge cleanly; together they make the covered-call ranking correct.🤖 Generated with Claude Code