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Risk and psychology

Breakeven

Definition

The price at which a position shows neither a profit nor a loss, before costs.

Example

Say you buy 100 shares at $45.00, so your breakeven is $45.00. After adding 100 more at $41.00, it moves to the new average cost of $43.00. Fees nudge the real breakeven a little higher: with $4 of total costs on the 200 shares, it rises by $0.02 to $43.02.

Hypothetical numbers, for illustration only.

Also defined in

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