Range planning
Earnings straddle breakeven calculator guide
For a simple long straddle, upper breakeven is stock price plus total straddle cost. Lower breakeven is stock price minus total straddle cost.
Use the range as a question
The range should prompt a research question: what would make the stock move beyond these levels, and what would invalidate the setup?
Stock price$100
Straddle cost$8
Lower breakeven$92
Upper breakeven$108
Why breakeven is not enough
A trade can have a clean breakeven and still be unattractive if spreads are wide, size is too large, or post-event IV falls more than expected.
Primary reading: OIC options pricing overview · OIC long straddle strategy · Investor.gov options overview