Offer your thoughts or opinion on the input financial query or topic using your financial background.

Break Even On Options Contracts
Simple answer: Breakeven is when the security being traded reaches a price equal to the cost of the option plus the option's strike price, assuming you choose to exercise it. So for example, if you paid $1.00 for,say, a call option with a strike price of $19.00, breakeven would be when the security itself reaches $20.00.  That being said, I can't imagine why you'd "close out a position" at the breakeven point.  You wouldn't make or lose money doing that, so it wouldn't be rational. Now, as the option approaches expiration, you may make adjustments to the position to reflect shifts in momentum of the stock.  So, if it looks as though the stock may not reach the option strike price, you could close out the position and take your lumps.  But if the stock has momentum that will carry it past the strike price by expiration, you may choose to augment your position with additional contracts, although this would obviously mean the new contracts would be priced higher, which raises your dollar cost basis, and this may not make much sense. Another option in this scenario is that if the stock is going to surpass strike price, it might be a good opportunity to buy additional calls with either later expiration dates or with higher strike prices, depending on how much higher you speculate the stock will climb.  I've managed to make some money doing this, buying options with strike prices just a dollar or two higher (or lower when playing puts), because the premiums were (in my opinion) underpriced to the potential peak of the stock by the expiration date.  Sometimes the new options were actually slightly cheaper than my original positions, so my dollar cost basis overall dropped somewhat, improving my profit percentages.