Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  BULLISH                                        
Profit Potential :  limited
Loss Potential   :  limited to 
                    the net premium                      
Breakeven Point  :

The investor breaks even when the market price equals:

• a) the lower exercise price plus the net premium.
  Yes. The most the investor can lose is the net premium paid. To recover the premium, the market price must be as great as the lower exercise price plus the net premium. Continue
  b) the higher exercise price plus the net premium.

(Click here for help)