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$3.90 number is the downside breakeven. If at expiration, the stock is $5+, he makes the maximum of $1.10 less commissions. Between $3.90 - $5.00, at expiration, the profit is the stock price less $3.90. Below $3.90, at expiration, he's got a loss.

There's more than a few moving parts in these unbalanced double calendars/diagonals. While it's a good mental exercise to try and figure out the greeks, you'll find a good P/L (risk) model is your best friend. A good ability in forecasting IV collapse and decent execution also will help. lol...

There will be some circumstances where a long iron condor (short the guts & long the wings) will work. But, for the vast majority of before/after earnings plays, I would suggest that you look at unbalanced calendars & diagonals. Get a good risk graph (P/L) software package to model these...

LOL! Always interesting to see if the people recommending software really know its functionality. Still use your freeware DOS program. Meets my needs. Have a simple spreadsheet model that adjusts the expected P/L for the after-event IV differences in the legs. However, what really...

If this is the software that also has risk graphs (P/L Graphs), I've got a question for you. When modeling a risk graph for a spread, can you enter the IV after an event (say an earnings event) for the individual legs of a spread?

Cybertrader is being combined with Schwab in Dec. and several of the execution problems at Schwab will, according to the Cybertrader people, be forced on Cybertrader clients. Three that really frost me are: 1) Cannot route option trades to specific exchanges. Schwab uses UBS and they seem...