BREAKEVEN POINT
break-even point: translation
the point at which volume of sales is enough to cover all costs. Glossary of Business Terms
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(1) The price level at which income equals expense.
(2) The expense level at which expense equals income.
(3) The market price of a financial instrument that just equals the purchase price plus cost of carry for an investor owning that instrument.
(4) The price level of a call option that equals the sum of the exercise price plus the premium paid to acquire the option, or the price level of a put option that equals the exercise price minus the premium. American Banker Glossary
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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. Bloomberg Financial Dictionary
2. long puts and short uncovered puts: strike price minus premium. Bloomberg Financial Dictionary
3. short covered call: purchase price of underlying stock minus premium. Bloomberg Financial Dictionary
4. short put covered by short stock: short sale price of underlying stock plus premium. Bloomberg Financial Dictionary
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break-even point break-even point ➔ point1
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The level at which an existing position in a market will produce neither a loss nor a gain. In company reporting terms the break-even point is where total sales exactly match total fixed and variable costs, so profit is zero. It can also be used for the point where total turnover exactly matches fixed costs.
► See also Fixed Costs.
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break-even point UK US noun [C or U]
► ACCOUNTING,
FINANCE reach break-even point »
We should reach break-even point after our first year.
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We have calculated that our break-even point would be 9,000 units sold.