Definition
The break-even point (BEP) identifies when an activity covers its costs. In trading, the break-even price is the exit price that offsets acquisition costs and applicable expenses for a specified position. It is often different from the average entry price because fees, borrowing interest, or funding payments can change the net result.
How It Works
For a simple example, buying one unit for 100 and paying total fixed transaction costs of 2 requires sale proceeds of 102 to break even. If the closing fee is proportional to the sale price, the calculation must include that fee’s changing amount rather than merely add an entry fee.
Key Considerations
A platform’s displayed break-even value depends on which costs it includes and how it treats partial closes or changing position size. It may update as charges accrue. A stop placed at that number does not guarantee a zero-loss exit: triggering, execution price, and slippage are separate. Taxes and other personal costs may sit outside the displayed calculation.