Been trading for a while but still get confused about breakeven price when it comes to options.
I understand it’s the price where you don’t make or lose money. But how exactly do you calculate it for different types of options?
Sometimes I think I’m breaking even but then realize I’m actually down because of fees.
The math part is simple but tracking all the costs can catch you off guard. Premium plus fees gives you the real breakeven point.
What helped me was creating a quick spreadsheet to track everything. Platform fees, spread costs, and any other charges add up fast.
Mobile trading makes it harder to see all the fees upfront. Double check the fee structure before placing trades so you know exactly what price you need to hit.
Breakeven calculation is straightforward. For call options, you add the premium you paid to the strike price. For put options, subtract the premium from the strike price. That’s your breakeven point.
Fees can complicate things. Many traders overlook commissions and platform fees in their calculations. Always include those costs in your breakeven formula to avoid thinking you’re in profit when you are not.
Knowing your breakeven point before entering a trade is crucial. If the asset needs to move too much to hit that point, the trade may not be worth the risk.
Breakeven gets tricky with binary options on Pocket Option since it’s fixed payout.
Fees destroyed my first few months because I ignored them completely in my calculations.
Lost about $300 thinking I was breaking even on Apple calls when the stock hit my target. Turns out commissions and spreads ate into everything.
Now I calculate breakeven including all costs before I even place the trade. Saves me from those painful surprises.
Call option breakeven = Strike price + Premium paid
Put option breakeven = Strike price - Premium paid
Include all fees in calculations. Account for platform charges and commissions.