// Stocks
Why Your Break-Even Differs From Your Broker's
The B/E under your average cost credits the option premium your shares actually earned. It is a projection over realized income, not a rewrite of what the shares cost.
Under your average cost sits a second number: the break-even, or B/E. It answers a question your broker doesn’t — given the option premium these particular shares have earned, where do you actually come out even?
// 01 · the idea
What the B/E line is
The arithmetic is unremarkable:
| Term | Meaning |
|---|---|
| Average cost | What your remaining shares cost, per share. |
| Credited premium | The option premium attributable to those shares. |
| B/E | Average cost minus credited premium per share. |
What matters is the middle row — deciding which premium belongs to the shares you still hold. That is the whole of the rest of this guide.
Click the B/E on a position and it shows its own working — every option trade it counted, what each one contributed per share, and why:
// 02 · the split
The two kinds of premium
Both are realized options income. They differ in what the premium is attributable to, and that decides whether it survives you selling some of the shares.
| Bucket | Earned for | So it is |
|---|---|---|
| Covered calls | Bearing risk across a holding window. | Attributable to that window — tied to the shares held at the time. |
| Assigned puts (and their rolls) | The obligation to buy a specific number of shares. | Attributable evenly per assigned share. |
A covered call was written against specific shares. A put’s premium was earned evenly across every share it obliged you to buy. That difference is why the two are treated differently.
// 03 · calls
Covered calls: the cutoff
Only calls opened at or after your last share sale are credited. Premium collected before that was earned while shares that have since left were still part of the position — it belongs to them, not to what remains.
And it is dropped whole, never pro-rated. A covered call is written against specific shares, quite possibly exactly the ones that were called away; crediting the survivors a fraction of that premium would invent a discount that never existed.
// 04 · puts
Assigned puts: share-scaled
Assigned-put premium is exempt from that cutoff, because its attribution never depended on when shares were sold. Instead it is scaled by the fraction of the assignment’s shares you still hold.
A put on 200 shares earns its premium evenly across all 200. Sell half and the remaining 100 carry their half of it — pro-rating is exact here, precisely because the per-share attribution is uniform. Rolls ride along with the put they came from, so the buyback costs of a rolled chain are part of the same figure.
// 06 · scope
What isn't in it
| Not included | Why |
|---|---|
| Dividends | The break-even credits option premium only. |
| Premium on other tickers | Attribution is per lot — a call on one ticker never touches another's B/E. |
| Unrealized option value | An open contract's premium is already received and counts; its current mark does not. |
Why it differs from your broker’s number
Most brokers show either a plain average cost with no premium in it at all, or a single running figure that credits every premium on the ticker regardless of which shares earned it. The first understates what the position has done; the second flatters it, and flatters it more the more shares you have sold.
For the same math carried through a full wheel — put, assignment, covered calls, called away — see the wheel strategy cost-basis guide, and how to track option rolls for what a roll is really worth.
The line appears wherever a lot is shown with its premium: Stock Trades, the Ticker Report, and the wheel view.