Reading the market regime before prices move
Reading the market regime before prices move
How far must the stock move for you not to lose? The breakeven point is the price at which an options position recovers its cost with no gain or loss. The tool calculates it for eight strategies and compares the required move with the Expected Move from Implied Volatility. Everything is calculated in your browser.
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With a covered call you collect the premium today and commit to selling your shares at the strike if the stock rises above it.With a cash-secured put you collect the premium today and commit to buying the shares at the strike if the stock falls below it.
The assignment probability is an estimate from the implied volatility you entered, not a forecast. In a covered call, the total return adds the premium to the gap between the strike and your share cost. The percentage next to the effective buy price is its discount to the stock price you entered. Capital set aside means the cash needed to buy the shares at the strike in a cash-secured put, and the share cost in a covered call. The annualized figure assumes a similar trade every expiry; it is arithmetic, not a promise.
From the last close before the weekend to the first open after it; the weekend has started, so the count runs from now.
The contract expires before the weekend, so the weekend does not affect it.
A Black-Scholes estimate using the implied volatility you entered; the percentage next to time decay is relative to the contract's value now. Implied volatility usually drops on Friday as the market prices the weekend in advance, so part of this effect may already be in the price before the close. News that breaks over the weekend is not part of the calculation.
An educational breakeven tool, not investment advice. The calculation assumes holding to expiration and ignores commissions, dividends and early exercise. One contract = 100 shares.
