Break even

(1) In general production terms the amount produced where costs and benefits are equal. Profitality is zero. (2) The price or time at which a derivative strategy has no gain or loss relative to another strategy, usually a cash position or a "do-nothing strategy". For example, the breakeven price of purchasing a call option is the strike price plus the option premium paid. The breakeven time of purchasing a knockout option is the time at which, if the option knocks out, the strategy of buying a knockout option and then a vanilla option for the remaining time is the same price as having bought a vanilla option to the maturity date in the first place.