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SIE: Options
SIE practice questionmediumBreakeven points

Breakeven on a short call is calculated as:

  1. ACurrent price minus premium
  2. BStrike price minus premium
  3. CCurrent price plus premium
  4. DStrike price plus premium✓ Correct answer
Explanation

Why DStrike price plus premium

Breakeven for short call writers = strike price + premium received. Buyers have reverse breakeven formulas.

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