How to use the options profit calculator
- Choose Call or Put, then Long if you bought the option or Short if you sold it.
- Enter the strike price, the premium per share you paid or received, the number of contracts and the shares per contract. Many stock option contracts cover 100 shares, so that is the starting value, and you can change it.
- Enter a stock price at expiration to test. It is a what-if number, not a forecast.
- Read the profit or loss per share, per contract and for all contracts, the break-even price, the maximum profit and the maximum loss. The table underneath shows the payoff at a range of prices around the strike.
Formula
Call value at expiration = max(price - strike, 0)
Put value at expiration = max(strike - price, 0)
Long profit per share = value - premium
Short profit per share = premium - value
Break-even: call = strike + premium, put = strike - premium
Total = profit per share x shares per contract x contracts
A long option can lose at most the premium. A long call has no upper limit on profit, and a long put can gain at most strike minus premium per share, because a stock cannot fall below zero. A short call has no upper limit on loss. A short put can lose at most strike minus premium per share.
A long call and a short put
You buy one call with a strike of $50 for a premium of $2.50 per share, covering 100 shares. At expiration the stock is at $56. The call is worth $6.00 per share, so you gain $6.00 minus $2.50, which is $3.50 per share and $350.00 for the contract. The break-even price is $52.50, and the most you can lose is the $250.00 premium. In the payoff table, $52.50 shows $0.00, $55.00 shows $2.50 per share and $57.50 shows $5.00 per share.
Now you sell 3 puts with a strike of $40 for $1.20 per share, and the stock ends at $35. Each put is worth $5.00, so you lose $5.00 minus $1.20, which is $3.80 per share, or $1,140.00 across 300 shares. The break-even is $38.80. The most you can make is the $360.00 premium, and the most you can lose, if the stock went to zero, is $11,640.00.
What this shows and what it leaves out
The calculator draws the payoff of one option position at the moment it expires. That is a clean piece of arithmetic, and it is the shape that traders and students usually start from. It does not tell you what the option is worth today, because before expiration an option also has time value that depends on volatility, interest rates and the time left.
It also leaves out commissions and fees, early exercise or assignment, taxes, dividends, margin and collateral needs. For stock gains on their own, use the stock profit calculator, and for sizing a trade against a loss limit see the position size calculator.
Reading the payoff table
The table is centered on the strike. Each row is a stock price at expiration, and the step between rows is a number you set. For a long call the losses are flat below the strike and the gains rise one for one above the break-even. A short option is the mirror image: the premium is the best case, and the loss grows as the price moves against you.
A put premium cannot be higher than the strike price, so the tool refuses that entry. If the numbers you typed produce a break-even of zero or less for a put, the page says there is no break-even.
Risk in plain words
Buying an option risks the premium, which can be the whole amount. Selling an option can risk much more than the premium received. A short call has no ceiling on its loss. This page is arithmetic on numbers you enter. It is not investment advice and it does not tell you whether a trade is wise.
Assumptions and limits
- Only the payoff at expiration is shown. Time value before expiration is not modeled.
- Commissions, fees, taxes, dividends, early exercise, assignment and margin are ignored.
- Each contract covers the number of shares you enter, 100 by default. Adjusted contracts can differ.
- The stock price at expiration is a number you choose, not a prediction.
Frequently asked questions
How do I find the break-even of an option?
For a call it is the strike plus the premium. For a put it is the strike minus the premium. At that stock price at expiration the option position makes neither a profit nor a loss, before fees and taxes.
Why is the loss on a long option limited to the premium?
You pay the premium up front and the option cannot be worth less than zero. If it expires with no value, the premium is what you lose.
Why is a short call's loss unlimited?
A stock price has no upper limit, and the seller of a call owes the gain above the strike. Each extra dollar of price adds a dollar per share to the loss, with only the premium to offset it.
What does per contract mean?
A quoted option price is per share. Multiplying by the shares per contract, 100 in many cases, gives the cost or payoff of one contract. The last column multiplies again by the number of contracts.
Does this tell me what an option is worth today?
No. It shows the result at expiration only. Today's price also includes time value, which depends on volatility, interest rates and the time left, and none of those are in this tool.