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Derivatives




Breakeven


The point at which a long option or a long option spread executed as a debit will break even in dollar terms, i.e., its payoff will be zero, at expiration.

Beyond this point (above it for a call and below it for a put) the trade becomes profitable or exercisable in the money at expiration.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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