In [1]:

    

import matplotlib.pyplot as plt
%pylab inline


    

    




Populating the interactive namespace from numpy and matplotlib

In [5]:

    

price = np.arange(900,1000,1)
strike = 940
premium = 7.5
payoff = [max(-premium, i - strike-premium) for i in price] 
plt.plot(price, payoff)
plt.xlabel('Price at T S_T ($)')
plt.ylabel('payoff')
plt.title('Call option Payoff at Expiry')
plt.grid(True)


    

In [6]:

    

price = np.arange(900,1000,1)
strike = 960
premium = 19.5
payoff = [max(-premium, strike - i -premium) for i in price] 
plt.plot(price, payoff)
plt.xlabel('Price at T S_T ($)')
plt.ylabel('payoff')
plt.title('Put option Payoff at Expiry')
plt.grid(True)