One of the more fundamental components to your position, regardless of which side of the market you’re on, is going to be your break-even point. This is literally the point at which your net result on the position is zero – no gain, no loss. At least, this is the case at expiration. As a beginner trader, it can be frustrating to see the underlying instrument move to your break-even point prior to expiration, only to see your position at a loss. As we see in today’s segment, this is because the market is multi-dimensional, and an option’s value is influenced by more than just the underlying price.
NOTE: The original slides had the "Xsc and Xsp" on slide #3, so that is why you see Dr. Jim reference this mistake. The slides in the archive are accurate.
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