Options Math: Calculating the BreakEven spot price for multiple Short Puts

thecoder

thecoder

Is it possible to calculate the BreakEven spot price for multiple Short Put positions, w/o using an options calculator?

Example:

Stock Price = 100
Days Till Expiration = 30
Short Put: Strike=85 Premium=1
Short Put: Strike=90 Premium=2
Short Put: Strike=95 Premium=3

That's 3 Short Put positions.
Can the BreakEven stock price for the expiration date be calculated w/o an options calculator?
(BreakEven in this context means when P/L=0, ie. no loss as well no win, ignoring commission & fees etc.)

Ie. does there exist an easy mathematical formula?
Or can this definitely not be done w/o an options calculator?
 
Last edited:
thecoder said:
You mean 95-6=89 ?
Why did you just use 95? What about the others (90 and 85)?

Using B/S options calculator gives a value of about 89.40 as can be read from the chart here:
https://optioncreator.com/st3xsc8
More...

89.40 is the closest increment at which the above calculator drops a dot on the curve; if you look closely, it's not on the expiration line. At 89.50, the 85 is worthless, the 90 is worth 0.50, and the 95 is worth 5.50 - i.e., equal to the total premium.

Backing out the formula for the above should be trivial for someone trying to sell his trading "system"...
 
BlueWaterSailor said:
89.40 is the closest increment at which the above calculator drops a dot on the curve; if you look closely, it's not on the expiration line. At 89.50, the 85 is worthless, the 90 is worth 0.50, and the 95 is worth 5.50 - i.e., equal to the total premium.

Backing out the formula for the above should be trivial for someone trying to sell his trading "system"...
More...
Are you accusing me of trying to sell a "system"? If yes, then pls show us the evidence, otherwise you owe me a public apology.
 
thecoder said:
Are you accusing me of trying to sell a "system"? If yes, then pls show us the evidence, otherwise you owe me a public apology.
More...

How do I put this gently...

You're just some shmoe in a forum; one who flails about making clueless assertions. I tried to help with a clue or two, but given this kind of entitlement? I owe you something???

Yeah... good luck with finding someone who gives a crap.

<PLONK>
 
It's an optimization problem: using options calculator requires an iterative solution, which of course gets very slow when doing this for thousands of such trade sets, ie. when scanning/searching/optimizing...
 
thecoder said:
It's an optimization problem: using options calculator requires an iterative solution, which of course gets very slow when doing this for thousands of such trade sets, ie. when scanning/searching/optimizing...
More...

The firm I worked at needed a super computer to do it that was so powerful that Amazon AWS refused to run it because it would have taken up 50percent of their computing power.
 
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