Break even point


 

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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 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

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