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Breakeven Point

Price where position has zero P/L

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What is Breakeven Point?

Breakeven Point The underlying price at which an option position results in neither profit nor loss at expiration. For calls: strike + premium paid. For puts: strike - premium paid.

Complete definition

The underlying price at which an option position results in neither profit nor loss at expiration. For calls: strike + premium paid. For puts: strike - premium paid.

Example

Buy $150 call for $3.00. Breakeven = $153. Stock must be above $153 at expiration to profit.

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What Is an Option? A Real S&P 500 Call Example One contract, five words and a real S&P 500 call. What the buyer gets, what the seller carries, and where the 7,750 call breaks even. Transcript and key takeaways Subscribe on YouTube

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By Ryan Silk & Lawrence Polatchek Last reviewed . Methodology is published in full.

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