How to calculate the Break even price if we buy both a Call option and a Put Option.
For Call (Break even ) Price = Strike Price + Premium Paid
For Put (Break even ) Price = Strike Price - Premium Paid
incase if i buy both buy and put at the same strike price what is the formula to find the Break even price (or break even range ).
This is called the Long Straddle, in such case there will be two Break Even Points, one at Upper level and one at Lower level, the formula to calculate will be like this Strike Price + Net Premium Paid for Upper BEP and Strike Price - Net Premium Paid for lower BEP.
For more you can read this chapter on Varsity.
calculation of breakeven is easy… You take a Strike Price and add net premium which will give you higher breakeven point and deduct net premium from Strike Price it will give you lower breakeven point.