# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Chance of Breakeven

The probability that a stock will be trading beyond the breakeven price as implied by the option price.

Chance of Breakeven can be used to get a sense for the valuation of the option by comparing the market’s estimate of Chance of Breakeven to estimates derived from your own fundamental research.

If you believe the Chance of Breakeven is less than the probability that a stock will be beyond the breakeven price at option expiration, then you believe the option is undervalued, and vice versa.

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