Covered Calls

CFA Level III Derivatives
#1

I think it’s kind of lam question, but I am freezing on it.

In the covered call, can’t get why is the breakeven price So-Co

What I understand is that breakeven should be the point at which the call buyer started to make a profit. Since teh buyer has already paid a premium should not the breakeven price be So+Co?

#2

Ita cause you’ve gained a premium out of selling the call and for that to be offset, you need your stock to tank by the premium you’ve received.

#3

think of it like the premium you receive lowers the cost basis for the stock you bought.