Option Breakeven Doubt

Hello TraderJi members,

I am confused with options "BreakEven" point. Breakeven point of a call option is defined as Strike Price+Premium. But in reality as soon as I purchase any stock at certain premium it soon starts getting increasing(if stock price is increasing). Theoretically it should be 0 before breakeven point and after crossing breakeven the value of my premium should increase.

For eg. Suppose currently SBI's 245 strike price call option for Sep 2015 expiry is quoting at a premium of 1.55 with spot price at 241.20. So ideally I should not make money till the breakeven i.e. 245+1.55=246.55 but as soon as the stock will become greater than 241.20 there is a movement in premium say at 242.0 spot price premium of SBI's 245 strike price call option for Sep 2015 expiry became 1.60. So why this increase of 0.05 points, ideally it should be 1.55 till the spot price becomes 246.55(breakeven).

Please help me out in removing this confusion.

Thanks.

Option Greeks are the key and IV is one of them.

Thanks for the clarification sir.
So, in that case such a case is only possible ideally only at the moment of expiry.

Yes ! Its at expiry! If you check the definition of BE point, a reference is given to "exercising' the Option which in case of all European options is the Date of expiry!

Just search for 'DELTA' and understand how it behaves in case of ATM and ITM positions. It is a huge area and you will have to devote some times.

It's all about time n movements of market