Definition of Break-even Point
Refers to the price at which a transaction produces neither a gain nor a loss. In the context of options, the term has the additional definitions: 1. Long calls and short uncovered calls: strike price plus premium. 2. Long puts and short uncoveredputs: strike price minus premium. 3. Short covered call:purchase price of underlying stock minus premium. 4. Short put covered by short stock: short sale price of underlying stock plus premium.