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Options 101
Calculating Break-Even on a Long Call or Put
The break-even formula is simple — but it answers a question a scalper isn't asking. Here's the number, and the more useful way to think about it intraday.
NoVo Options Trading · 2026
Break-even is the underlying price at which your option would be worth exactly what you paid at expiration. For a long call it's the strike plus the premium; for a long put it's the strike minus the premium.
The formulas
Long call break-even = strike + premium paid. Buy the SPY 741 call for $1.20 and, held to expiration, you break even at 742.20 — SPY has to clear the strike and pay back your premium.
Long put break-even = strike − premium paid. Buy the 739 put for $1.00 and you break even at 738.00.
Why scalpers profit long before break-even
That formula assumes you hold to expiration, when only intrinsic value remains. A scalper almost never does. Intraday, your option still carries extrinsic (time) value, so a favorable move makes you money well before price reaches the expiration break-even. If you buy the 741 call and SPY jumps to 741.50 in ten minutes, you're likely green — even though the “break-even” is 742.20 — because the option still holds time value.
Break-even is where a holder profits. A scalper is a renter of time value — you're out long before the clock forces the question.
The trap
The danger runs the other way too: as expiration nears, that time-value cushion evaporates (theta), and the expiration break-even becomes very real very fast. An option that was green mid-morning can need SPY to actually clear break-even by mid-afternoon. Know both numbers — the intraday reality and the expiration line — and don't let a winning scalp turn into a hold that has to reach break-even to survive.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.