Model and input conventions
The per-unit payoff is max(put strike − terminal price, 0) plus max(terminal price − call strike, 0). Deduct both premiums, scale by equal underlying units and subtract fixed total costs. The put strike must be strictly below the call strike. Unlike a straddle, the lowest intrinsic value persists throughout an interval instead of only at a single common strike.
Worked numerical example
Buy a 90-strike put for 3 and a 110-strike call for 4. With one unit and no fees, every terminal price from 90 through 110 loses 7. The lower break-even is 83 and the upper is 117. An expiry at 80 earns 3, whereas an expiry at 120 also earns 3. Those equal profits arise from the selected strikes and premiums, not a forecast that the moves are equally probable.
Read the scenario table
Follow the table from below the put strike, through the middle interval, and above the call strike. The stock P&L column remains zero because this is an options-only position. Adding fees widens the distance to break-even without changing either intrinsic-payoff kink. If the lower algebraic break-even falls below zero, the calculator removes it instead of displaying a terminal price outside the model’s domain.
Where the model stops
Cheaper premiums in one quoted strangle do not establish that it is better than a straddle; the strikes also change how much movement is needed. This tool prices no pre-expiry resale and estimates no volatility forecast. European-style cash settlement, a nonnegative underlying price and fixed quantities are assumed. Exercise mechanics, financing and counterparty outcomes can differ from the terminal algebra.