Chapter 06 · Section 6.1

Breakeven Point

Write Puts
Market Outlook   :  BULLISH
Profit Potential :  limited to the 
                    premium received
Loss Potential   :  practically 
                    unlimited 
Breakeven Point  :

The breakeven point occurs when the market price equals the exercise price:

b) minus the premium.
Yes. At any price less than the exercise price minus the premium, the investor loses money on the transaction. At higher prices, his option is profitable. Continue

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