Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  STABLE
Profit Potential :  limited
Loss Potential   :  practically unlimited
Breakeven Points :

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

e) b and c
Yes. The trader is short two positions and thus, two breakeven points. One for the call (high exercise price plus the premiums paid), and one for the put (low exercise price minus the premiums paid). Continue
f) b and d