Break-Even Point (Options)
Definition
The underlying price at which an options position results in neither profit nor loss at expiration. For a long call: strike + premium paid. For a long put: strike − premium paid.
Formula / Rules
Call Break-Even = Strike Price + Premium Paid | Put Break-Even = Strike Price − Premium Paid
Example
A long call at $100 strike for $5 premium has a break-even of $105 — the stock must close above $105 to profit at expiration.
Related Terms
Frequently Asked Question
What is the Break-Even Point for options?
Break-even = strike + premium (calls) or strike − premium (puts). At expiration, the underlying must cross break-even for the buyer to profit. Option sellers need underlying to stay inside break-evens.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.