Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  VOLATILE
Profit Potential :  limited on upside, 
                    practically 
                    unlimited on 
                    downside
Loss Potential   :  limited
Breakeven Points :

The low breakeven point indicated on the graph is equal to the lower of the two exercise prices...

a) plus the call premiums paid, minus the net premiums received.
No. You need to move to the left along the horizontal axix, not to the right.
b) minus the call premiums paid, minus the net premiums received.

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