The below diagram shows the payoff for the four different kinds of european vanilla options.
| Call | Put | |
| Long position | Call, long (bought) | Put, long (bought) |
| Short position | Call, short (sold) | Put, short (sold) |
S is the spot price of the underlying. K is the strike price. T is the maturity time. ST is the price of the underlying at expiry. P(ST) is the payoff at expiry.
This type of chart is also known as a profit/loss diagram, and because of the characteristic shape they are also known as hockey sticks.
The way the diagrams are arranged make them easy to remember, and thus makes for a nice cheat sheet.
Buying or selling a call or put option is the most common option strategy, but they can also be combined to make more sofisticated strategies (strangles, straddles etc). The ones shown in the diagram are called vanilla options.
(Sorry for the chart text being in Danish. I will soon make an update.)