Break-Even Price

The price the underlying asset must reach at expiry for an option position to neither gain nor lose.

Example

A call with strike 105 and premium 3 breaks even at 108.

It is usually well beyond the strike, so the asset must move further than people expect just to recover the cost.

Strike Price — The price at which an option holder can buy (for a call) or sell (for a put) the underlying asset.
Option Premium — The price paid by an option buyer to the seller for the contract.

Big percentages on a small bet, and most bets expire worthless — Option payoffs are lopsided: a bought option can multiply its premium or lose all of it, and the price usually has to move a long way just to break even. (12 min)
Appraising one position: maximum loss, break-even, cost and what you are really betting on — Before any derivatives trade, write down five numbers. If you cannot fill them in, you are not evaluating a position - you are guessing. (11 min)