Where a call or put turns a profit.
A worked example
Starting figures
- Strike price
- $100
- Premium paid
- $4.20
- Contracts
- 2
What it returns
- Call break-even
- $104.2
- Put break-even
- $95.8
- Total premium
- $840
- Max loss (long option)
- $840
How to read the results
With the defaults above, call break-even works out at $104.2.