Straddle Breakeven Calculator
A straddle is a volatility strategy where you buy (or sell) both a call and a put at the same strike price and expiration. The total premium paid is the cost of the strategy, and the two breakeven prices represent the stock prices at expiration where the position is exactly at breakeven. Above the upper breakeven, the long call profits more than the combined premium cost. Below the lower breakeven, the long put profits more than the combined premium cost. Between the two breakeven prices at expiration, the straddle loses money. This calculator shows the breakeven prices, the required percentage move in the stock from the current price to reach each breakeven, and the maximum loss (which equals the total premium paid).
Straddle breakeven formula
Total Premium = call premium + put premium
Upper Breakeven = strike + total premium
Lower Breakeven = strike - total premium
Required Move = total premium / stock price * 100
Max Loss (long) = total premium * 100 (per contract)
Max Loss (short) = unlimited (upside); strike - total premium (downside)
The required move percentage is the minimum stock move from the current price needed to reach breakeven, expressed as a percentage of the current stock price.
Straddle trading notes
- Compare the implied required move (from option pricing) to historical earnings moves for the stock to assess value.
- If the stock has historically moved more than the straddle's required move after earnings, the straddle may be underpriced.
- IV crush after earnings can devastate long straddles: even if the stock moves, the drop in implied volatility reduces option values sharply.
- Short straddles collect the total premium as maximum profit but face unlimited risk on the upside and large risk to the downside.
- Straddle buyers benefit from realized volatility exceeding implied volatility; straddle sellers benefit from the opposite.
Frequently asked questions
What is a straddle?
A straddle involves buying (or selling) a call and a put with the same strike price and expiration date on the same underlying asset. A long straddle profits from large moves in either direction; a short straddle profits from the stock staying near the strike.
How are straddle breakevens calculated?
Upper breakeven = strike + total premium paid. Lower breakeven = strike - total premium paid. The stock must move beyond these levels at expiration for the long straddle to be profitable. For a short straddle, the breakevens are the same prices but represent the zone of maximum profit.
What is the maximum profit on a long straddle?
There is no cap on the upside profit if the stock rises dramatically. The maximum profit to the downside is strike minus premium (if the stock goes to zero). Maximum loss equals the total premium paid, occurring when the stock expires exactly at the strike.
When is a straddle most suitable?
A long straddle is used before high-uncertainty events such as earnings announcements, FDA decisions, or macro data releases, when a large move is expected but the direction is unknown. A short straddle is used when you expect the stock to remain stable and implied volatility is high.
What is the difference between a straddle and a strangle?
A strangle uses different strike prices: a lower strike for the put and a higher strike for the call. Strangles are cheaper than straddles (lower total premium) but require a larger move to become profitable. Straddles have strikes equal (at-the-money).
Official sources
- Options Clearing Corporation: theocc.com.
- CBOE Options Institute: cboe.com/education.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.