Breakeven
Also called: breakeven price, breakeven point
The price of the underlying at which a position neither gains nor loses, before costs.
For a long call, breakeven at expiry is the strike plus the premium; for a long put, the strike minus the premium. Sellers have the same breakevens. Costs move the real breakeven further away.
Example
A ₹1,000 call bought for ₹30 breaks even at ₹1,030 at expiry.
Learn more in these lessons
- Option payoff diagrams and breakevensHow do you work out where an option position makes or loses money?
Related terms
Spotted a mistake or something unclear? Report it by email. Here is how corrections work.