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Break-even point (warrants)

At break-even point, the price of the underlying instrument is such that if the warrant holder chooses to exercise the option, he will neither make a profit nor incur a loss.

A call warrant reaches the break-even point when the market price of the underlying instrument is equivalent to the exercise price plus the price of the warrant. A put warrant reaches the break-even point when the market price of the underlying instrument corresponds to the exercise price minus the price of the warrant.

The break-even point is one of the variables used in determining the value of a warrant.
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