Breakeven Price


DEFINITION of 'Breakeven Price'

1. The amount of money for which an asset must be sold to cover the costs of acquiring and owning it.

2. The amount of money for which a product or service must be sold to cover the costs of manufacturing or providing it.

3. In options trading, the stock price at which investors can choose to exercise without incurring a loss.

BREAKING DOWN 'Breakeven Price'

Breakeven prices can be translated to almost any transcation. For example, the breakeven price of a house would be the sale price the owner would need to get to cover the home's purchase price, interest paid on the mortgage, hazard insurance, property taxes, maintenance, improvements, closing costs and real estate sales commission. At this price, the homeowner would not see any profit, but also would not lose any money.

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