Break-Even Point

Business, Legal & Accounting Glossary

Definition: Break-Even Point

Break-Even Point

What is the dictionary definition of Break-Even Point?

Dictionary Definition

  1. The price at which an option’s cost is equal to the proceeds acquired by exercising the option. For a call option, it is the strike price plus the premium paid. For a put option, it is the strike price minus the premium paid.
  2. The price at which a securities transaction produces neither a gain nor a loss. 3. The volume of sales at which a company’s net sales just equals its costs.

Full Definition of Break-Even Point

The break-even point for any investment is the price at which an investor neither makes nor loses money on that investment.

An investor’s break-even point must include the recoupment of all fees, commissions and other expenses associated with the purchase and sale of the investment. When trading options, the break-even point for a call option is the option’s strike price plus its premium. For a put option, the break-even point is the strike price of the option minus the option’s premium. For a business, the break-even point is the point at which a company’s net income precisely equals it costs. In the case of real estate, the break-even point occurs when rental income exactly matches all debt expenses. Knowing an investment’s break-even point is considered essential for effective money management.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Break-Even Point. Payroll & Accounting Heaven Ltd.
January 17, 2022
Chicago Manual of Style (CMS):
Break-Even Point. Payroll & Accounting Heaven Ltd. (accessed: January 17, 2022).
American Psychological Association (APA):
Break-Even Point. Retrieved January 17, 2022
, from website:

Definition Sources

Definitions for Break-Even Point are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.