Calculating ROI

If called out, you get 2 sources of income.
The 1st is from the difference between the 2 strikes, because you have to buy back your short position and sell your long position.

The 2nd source is from the credit that you earned when you sold your short position to get into the trade (whether initial or roll).

Called Out Formula:
((Difference between 2 strikes) - Cost Basis (or Adj. Cost Basis if you've already rolled)) /
divided by Cost Basis (or Adj. Cost Basis if you've already rolled)


If you are not called out, you get 1 source of income.
This comes from the credit that you earned when you sold your short position.

Not Called Formula:
If 1st time doing the trade:
Credit/ Debit (from purchase of long position only)

If Rolling to next month or Rolling to adjust:
Credit/ Adjusted Cost Basis