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Break even point |
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Break even pointRefers 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 uncovered puts: strike price minus premium. 3. Short covered call: purchase price minus premium. 4. Short put covered by short stock: short sale price of underlying stock plus premium.Break even point Similar MatchesCircuit breakersCircuit breakersMeasures instituted by exchanges to stop trading temporarily when the market has fallen by a certain percentage in a specified period. They are intended to prevent a market free fall by permitting buy and sell orders to rebalance. Break up valueBreak up valueThe total value of all a company's separate operations if sold separately.The terms is used most often when contrasted with the market capitalisation of the company as a whole, and the implication is that if the sum of the parts is greater than the whole, the company should be split up to release the extra value to shareholders. Bed and breakfastBed and breakfastThe practice of selling shares on one day and buying them back on the next. The purpose for UK taxpayers was to crystallise a gain (or loss) in a share which could then be:offset against gains on other shares in the same tax year orused against an annual capital gains tax allowance (£7,700 of tax-free gains in 2002-2003, rising to £7,900 of tax-free gains in 2003-2004)The anti-avoidance provisions of the 1998 Budget effectively ended the practice of bed and breakfasting by making it impossible to get the tax advantage. Circuit breakerCircuit breakerA defensive regulation which some stock exchanges have to limit the damage of a sharp fall in prices. The reasoning behind them is that downward price movements attain their own dangerous momentum and can lead to panic selling. Circuit breakers allow the exchange to suspend trading or in some way limit it to stop things getting out of hand.On the New York Stock Exchange, for instance, there are rules which allow the exchange to stop trading for the rest of the day if the Dow index falls 30% from the previous day's close. Breakpoint saleBreakpoint saleFor mutual funds, refers to the investment amount necessary to make the fundholder eligible for a reduced sales charge. See: Letter of intent; right of accumulation. Further SuggestionsCash flow break even pointBreak even time break even Breaking the syndicate Break even tax rate Breakeven point breakout Arrears breakdown Break even lease payment Decision Break Point Analysis Balance breakdown Break even analysis Breakup value Tax break Break even payment rate Market break |
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