of the 2 breakeven prices for the butterfly spread, i cant figure out the 2nd… 2(mid-call) - Xlow-call - premiums, for the life of me. in my mind i feel like cheap call should appreciate until the price of the middle calls, before it gets called away.作者: Kapie 时间: 2013-4-22 14:09
The high breakeven is just the high strike minus the cost of the butterfly.
High Strike - (high call price + low call price - 2*mid call price)作者: NakedPuts2011 时间: 2013-4-22 14:09
They way I remember it:
BE1 + X(L) + C(L) - 2C(MID) + C(H)
Go other direction and flip signs
BE2 = X(H) - C(L) + 2C(MDI) - C(H)
This assumes H/L calls are even distance from MID.作者: yuoska 时间: 2013-4-22 14:10
wow, so basically low strike + premiums and high strike - premiums. u could have saved me 2 hours of my life作者: invic 时间: 2013-4-22 14:10
pretty evident if you look at the diagram too.
it is a 45 degree line from the strike to the 0 profit line one backward from Hi Strike and one forward from the Low Strike.
