Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  VOLATILE
Profit Potential :  practically 
                    unlimited
Loss Potential   :  limited to 
                    the sum of 
                    the premiums
Breakeven Points  :

The breakeven points occur when the market price at expiration equals the exercise price ...

c) a and b
Yes. The trader is long two positions and thus, two breakeven points; One for the call (common exercise price plus the premiums paid), and one for the put (common exercise price minus the premiums paid). Continue

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