Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  BEARISH
Profit Potential :  practically 
                    unlimited
Loss Potential   :  limited to the 
                    amount of the 
                    premium
Breakeven Point  :

The trader's breakeven point is the exercise price:

a) plus the premium.
No. At this market price, the put would be out-of-the-money and the trader would be in a losing position.
b) minus the premium.

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