Breakeven Point - BEP


DEFINITION of 'Breakeven Point - BEP'

1. In general, the point at which gains equal losses.

2. In options, the market price that a stock must reach for option buyers to avoid a loss if they exercise. For a call, it is the strike price plus the premium paid. For a put, it is the strike price minus the premium paid.

Also referred to as a "breakeven".


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BREAKING DOWN 'Breakeven Point - BEP'

For businesses, reaching the break-even point is the first major step towards profitability.

  1. Revenue

    The amount of money that a company actually receives during a ...
  2. Breakeven Price

    1. The amount of money for which an asset must be sold to cover ...
  3. Breakeven Yield

    The yield required to cover the cost of marketing a banking product ...
  4. Option

    A financial derivative that represents a contract sold by one ...
  5. Profit Range

    A range of prices that an underlying security can possess in ...
  6. Expense

    1. The economic costs that a business incurs through its operations ...
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  1. How do you find the break-even point using a payback period?

    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>
  2. What is the relationship between degree of operating leverage and profits?

    The degree of operating leverage directly reflects a company's cost structure, and cost structure is a significant variable ... Read Full Answer >>
  3. What does break-even analysis tell a business about its shutdown point?

    Break-even analysis tells a company how many months it has left to operate based on the amount of expected cash flow and ... Read Full Answer >>
  4. How do traders use debit spreads to protect against loss?

    Options traders use debit spreads, also called net debit spreads, to exchange possible returns for reduced downside risk. ... Read Full Answer >>
  5. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  6. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>

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