Options Breakeven Formulas Cheat Sheet

Every options strategy has a breakeven price (or two) — the underlying price at expiration where you neither make nor lose money. Knowing the formula off the top of your head saves you from having to rebuild the logic every time you look at a new trade. This page collects the breakeven formulas for the most common single-leg and multi-leg strategies in one place, with a short explanation of why each formula works, not just what it is.

Bookmark this page as a quick reference. For deeper dives into any individual strategy, see the linked guides below, or use the options profit calculator to compute breakeven, max profit, and max loss automatically. Definitions of terms like strike, premium, and assignment are in the options glossary.

The Cheat Sheet

Long Call

Breakeven = strike + premium paid

When you buy a call, you’re paying a premium for the right to buy shares at the strike price. The stock has to rise far enough to cover both the strike and the premium before you’re in profit — so breakeven sits above the strike by exactly the amount you paid. See the long call 101 guide.

Long Put

Breakeven = strike − premium paid

Buying a put gives you the right to sell shares at the strike price. Since you profit as the stock falls, and you’ve already spent money on the premium, the stock has to fall below the strike by the amount of the premium before you’re in the green. Breakeven sits below the strike. See the long put 101 guide.

Covered Call

Breakeven = cost basis − premium received

You already own the stock, so your risk is tied to your original purchase price (cost basis), not the option’s strike. The premium you collect for selling the call is cash in hand regardless of outcome, so it directly lowers the price at which you start losing money relative to just holding the stock. See the full covered call breakeven and return guide or the covered call strategy overview.

Cash-Secured Put

Breakeven = strike − premium received

If you’re assigned, you buy shares at the strike price, but the premium you already collected offsets part of that cost. Your effective purchase price — and therefore your breakeven — is the strike minus the premium. See the full cash-secured put return and breakeven guide or selling naked puts.

Bull Call Spread (Debit Spread)

Breakeven = long call strike + net debit

A bull call spread costs money to open (a net debit) because the call you buy is more expensive than the call you sell. The stock needs to rise past your long strike by at least the amount of that debit before the position turns profitable. See the bull call spread 101 guide.

Bear Put Spread (Debit Spread)

Breakeven = long put strike − net debit

Mirroring the bull call spread, a bear put spread also costs a net debit. The stock needs to fall below your long put strike by at least the debit amount before you’re profitable. See the bear put spread 101 guide.

Put Credit Spread (Bull Put Spread)

Breakeven = short strike − net credit

You’re selling a put credit spread and collecting a net credit. Since you profit as long as the stock stays above your short put, the credit gives you a cushion below that strike — moving your breakeven down. For the full walkthrough with worked numbers, see how to calculate max loss on a credit spread.

Call Credit Spread (Bear Call Spread)

Breakeven = short strike + net credit

The mirror image of the put credit spread. You profit as long as the stock stays below your short call, so the credit received pushes your breakeven up, away from the strike, giving you more room before the trade loses money.

Iron Condor (Two Breakevens)

Lower breakeven = short put strike − net credit Upper breakeven = short call strike + net credit

An iron condor combines a put credit spread and a call credit spread, so it inherits a breakeven formula from each side, using the combined net credit from both spreads. Between these two prices, the position is profitable. Outside them, it’s at a loss, up to the max loss on whichever side is breached. For a full worked example, including the common mistake around calculating max loss when the wings are different widths, see how to calculate max loss and max profit on an iron condor. For the mechanics of the strategy itself, see the iron condor 101 guide.

Why Breakeven Isn’t the Whole Picture

Breakeven tells you the exact price where a position flips from loss to profit, but it doesn’t tell you the probability of getting there, how much time is left, or how the position behaves before expiration due to changes in implied volatility or time decay. Two trades can have the same breakeven and very different risk profiles. Use breakeven as one input among several — alongside max profit, max loss, and your own outlook on the underlying — rather than a standalone decision rule.

It’s also worth remembering that all of the formulas above describe breakeven at expiration. Before expiration, an option’s market price reflects extrinsic value (time value and implied volatility) in addition to intrinsic value, so the price at which a position is breakeven today can differ from the breakeven price calculated here.

Frequently Asked Questions

What is the breakeven formula for a call option? For a long call, breakeven = strike price + premium paid. The stock must rise above the strike by at least the premium amount for the position to be profitable at expiration.

What is the breakeven formula for a put option? For a long put, breakeven = strike price − premium paid. The stock must fall below the strike by at least the premium amount for the position to be profitable at expiration.

How many breakeven points does an iron condor have? Two: a lower breakeven (short put strike − net credit) and an upper breakeven (short call strike + net credit). The position is profitable anywhere between these two prices at expiration.

Is breakeven the same as max profit or max loss? No. Breakeven is the specific underlying price where profit and loss cross zero. Max profit and max loss are the dollar limits of the position’s best and worst outcomes, which occur at or beyond certain prices — not at the breakeven price itself.