Breakeven Calculator
Calculate your breakeven price, risk/reward ratio, and R-multiple for any trade. See the minimum win rate needed to be profitable with your setup.
Enter your entry, stop loss, and target prices, then click Calculate to see your risk/reward ratio and breakeven analysis.
For educational purposes only. Not financial advice. Read full disclaimer
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Want the full context? See the full trade planning workflow →
Risk/Reward Formulas
R-Multiple = |Target - Entry| / |Entry - Stop|
Min Win Rate = 1 / (1 + R-Multiple) × 100
Breakeven = Entry ± (Commission × 2 / Shares)
Worked Examples
Example 1: Long Trade with 1:3 R:R Ratio
You buy a stock at $50.00 with a stop at $48.00 and a target at $56.00. You buy 100 shares and pay $5.00 commission each way.
- Risk per share = $50.00 − $48.00 = $2.00
- Reward per share = $56.00 − $50.00 = $6.00
- R-Multiple = $6.00 / $2.00 = 3.0R
- Min win rate = 1 / (1 + 3.0) × 100 = 25%
- Commission adjustment = ($5.00 × 2) / 100 shares = $0.10 per share
- Breakeven price = $50.00 + $0.10 = $50.10
Example 2: Short Trade with Negative R:R
You short a stock at $100.00 with a stop at $103.00 and a target at $98.50. The R:R is unfavorable.
- Risk per share = $103.00 − $100.00 = $3.00
- Reward per share = $100.00 − $98.50 = $1.50
- R-Multiple = $1.50 / $3.00 = 0.5R
- Min win rate = 1 / (1 + 0.5) × 100 = 66.7%
- Result: You need to win more than 2 out of 3 trades just to break even — this setup is not worth taking.
How to Use This Calculator
- Enter your entry price — the price at which you plan to open the trade.
- Set your stop loss — the price where you'd exit to limit your loss.
- Set your target price — the price where you'd exit to take profit.
- Add shares and commission (optional) — include these to see the commission-adjusted breakeven price.
- Click Calculate — review the R-Multiple, minimum win rate, and breakeven price to decide if the trade is worth taking.
Frequently Asked Questions
- What is an R-multiple?
- An R-multiple expresses your potential reward as a ratio of your risk. A 2R trade means your target is twice as far from entry as your stop loss. Tracking R-multiples lets you compare trades objectively regardless of dollar amounts.
- What's a good risk/reward ratio?
- Most professional traders target at least 2:1 reward-to-risk (2R). At 2R, you only need to win 33% of trades to break even, giving you a large margin for error. Setups below 1R generally require a very high win rate to be profitable.
- How do commissions affect breakeven?
- Commissions add a small per-share cost that raises your effective breakeven price on a long trade (or lowers it on a short). On small positions or very tight setups, commission drag can meaningfully reduce your real edge.
- Does this work for options trades?
- Yes — enter your net debit or credit as the effective entry price, your max loss level as the stop, and your target exit price. The R-multiple and win rate math applies the same way, though options have additional factors like time decay and delta.
- What if the R-multiple is below 1?
- An R-multiple below 1.0 means you're risking more than your potential reward. To break even on a 0.5R trade, you'd need a 67% win rate. Unless you have strong evidence of an exceptionally high win rate, these setups are generally not worth taking.