... that case, the loss is equal to the commissions paid for the trade. On the other hand, if the stock falls sharply, the losses can besubstantial. The downside breakeven is equal to: higher strike ... belief the stock was about to reverse course.Straddles, Strangles, and Synthetics 2 31 ccc_fontanills_ch8 _18 7-233.qxd 12 /17 /04 4:32 PM Page 2 31 fly is derived from the purchase of the “wings” of the ... debit),or $15 : [25 – (5 × 2)] ÷ (2 – 1) – 0 = $15 ]. Losses begin to develop as the stock moves below the breakeven and are limited to the stock falling to zero. In this case, if the stock falls to zero,...