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How are the Max Gain and Break Even calculated here on Fidelity?

I thought the breakeven would be the strike price of the long call plus the net debit: $16 + $6.03 = $22.03
And the max gain would be the difference in strike prices of the two calls minus the net debit: $25 - $16 - $6.03 = $2.97 * 100

1 Answer 1


It's not that simple, since you're looking at a diagonal spread (short leg expires in Jul 2023, long leg expires in Jan 2024). It also looks like there's no volume.

As an aside, DFEN is a triple-leveraged ETF, which resets daily. I'd think twice before buying long-dated options or buying-and-holding it

  • Thanks for your answer. I just happened to pick DFEN for this example. So, is there some other parameter that I'm missing like time value of the long leg? Commented Jul 4, 2023 at 2:28
  • 1
    Aside from that, why would you sell a zero cost call? I'm the very best scenario, it helps you nothing. In the worst case, you can hav unlimited losses. It may help to ask what you are actually trying to buy instead of getting an explanation for what this structure is (not). Because the trade depends on the volatility level, it is impossible to know exactly where breakeven is. They probably use current IV.
    – AKdemy
    Commented Jul 4, 2023 at 6:06

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