What is the Breakeven Point in Trading?

The breakeven point in trading is the price at which a trade recovers its initial cost without producing a profit or loss, after considering the relevant trading costs. For a simple long position, it can be calculated as follows:

• Breakeven Price=PurchasePrice+Transaction Costs Per Share

For example, suppose a stock is purchased at ₹500 and the applicable costs amount to ₹2 per share. Now, the breakeven price is ₹502.

How to Calculate Breakeven in Options

For example, suppose you bought a call option with a strike price of ₹100 at a ₹5 premium. Now, the breakeven price is ₹105 at expiry, before transaction costs.

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