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...

b) minus the call premiums paid, minus the net premiums received.
Yes. The higher of this position's two breakeven points is simply the high exercise price minus the net premium. Continue

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