Start from cash flow, not price difference

For a long position, break-even sale proceeds must repay the adjusted entry notional, entry commissions and exit commissions. If percentage commission depends on the sale price, it belongs on both sides of the equation.

Long break-even = (Entry notional + Entry fees + Fixed exit fee) ÷ [Shares × (1 − Exit fee rate)] + Exit slippage

Here entry notional uses the entry price after slippage, and the fee rate is expressed as a decimal. RiskSized solves the same equation from the inputs instead of adding an approximate fee amount to the entry.

A fixed-fee example

You buy 20 shares at an adjusted entry of $50.05. Entry commission is $1 and fixed exit commission is $1. There is no percentage exit fee, but you assume $0.05 adverse slippage when exiting.

Break-even = ($1,001 + $1 + $1) ÷ 20 + $0.05 = $50.20

At a quoted exit of $50.20, the assumed execution is $50.15. Sale proceeds are $1,003; after the $1 exit fee, $1,002 remains—exactly the entry notional plus entry fee.

Why percentage fees need algebra

If the broker charges 0.1% of sale proceeds, adding 0.1% of the entry to the entry price is only an approximation. The actual fee depends on the unknown break-even sale itself.

For a long, the exit fee is subtracted from proceeds. Dividing by 1 − fee rate handles this circularity. For a short, the corresponding denominator is 1 + fee rate, because buying back the short adds the exit fee to the cash required.

Short break-even = (Entry notional − Entry fee + Fixed exit fee) ÷ [Shares × (1 + Exit fee rate)] − Exit slippage

RiskSized's short “entry fee” is deducted from opening short-sale proceeds, so its sign reverses in the break-even numerator. With a 1% entry fee, $2,000 of short entry notional provides a $20 fee debit and leaves $1,980 before exit costs. If the exit fee is also 1%, the fee-only break-even is $1,980 ÷ [20 × 1.01] = $98.0198, not $100.

Short break-even is normally below the entry: proceeds remaining from opening the short must cover the later buyback and all costs. If the calculated price is not positive, no valid positive-price break-even exists under those assumptions.

What is not in this break-even

  • Income or capital-gains taxes.
  • Borrow fees and margin interest for short or leveraged positions.
  • Market impact, widening spreads and slippage beyond the entered assumption.
  • Dividends, corporate actions, currency conversion and regulatory charges not entered manually.
Break-even is not a target.

It only answers where estimated net P&L crosses zero. It says nothing about whether the stock is likely to reach that price or whether the trade is worth taking.

Check the custom exit too

Break-even is one point on the P&L curve. RiskSized also lets you enter any custom exit to inspect net profit or loss, which is useful for gap scenarios and partial planning.

Reviewed November 1, 2026 · Educational content, not personalized investment advice.