Calculate call and put option profits instantly. See breakeven price, max profit, max loss, ROI, and visual payoff chart with step-by-step formulas.
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Calculating options profit helps traders understand potential returns before entering a position. For call options, profit equals the difference between the stock price and the strike price, minus the premium paid, multiplied by the number of shares. For put options, profit equals the strike price minus the stock price, minus the premium, times the shares. This calculator handles both call and put options, showing you break-even prices, maximum risk, return on investment, and a visual payoff diagram with step-by-step calculation formulas.
An options contract gives the buyer the right, but not the obligation, to buy or sell a stock at a specific price (the strike price) before a certain date (the expiration date). A call option gives the right to buy — traders buy calls when they expect the stock price to rise. A put option gives the right to sell — traders buy puts when they expect the price to fall. The price paid for the option is called the premium, and each standard contract controls 100 shares of the underlying stock.
Options Profit Formula
Call Profit = (Stock Price - Strike Price - Premium) x Shares | Put Profit = (Strike Price - Stock Price - Premium) x SharesKnow exactly what stock price you need to reach to start profiting on your trade, accounting for the premium paid.
The payoff diagram shows your profit or loss at every possible stock price, helping you see exactly where you make or lose money.
When buying options, your maximum loss is always limited to the premium paid. See this amount clearly before committing capital.
Quickly switch between call and put calculations to analyze both bullish and bearish trade opportunities side by side.
Learn the exact math behind options pricing with detailed LaTeX-rendered formulas showing every step of the calculation.
Calculate your potential return on investment percentage so you can compare different option trades and pick the best opportunity.
Use preset example trades to learn how options work without real money risk. See how different scenarios affect profitability.
Evaluate potential options trades before committing capital. Compare different strike prices and premiums to find the best risk-reward ratio.
Model potential outcomes before earnings announcements. Calculate how much a stock needs to move to make your options trade profitable.
Understand worst-case scenarios before entering positions. Know your maximum loss and break-even point to manage portfolio risk effectively.
Evaluate protective puts for existing stock positions. Calculate the cost of insurance and at what point the protection becomes valuable.
Students and beginners learning about derivatives can use the step-by-step formulas and presets to understand how options pricing works.
Calculate premium income versus the risk of assignment when selling covered calls against stock you already own.
Document expected versus actual outcomes for trade improvement. Compare projected ROI with actual results to refine your trading strategy.
Call option profit = (Current Stock Price minus Strike Price minus Premium) multiplied by the Number of Shares. If the stock price is above the strike price plus the premium paid, the option is profitable. For example, if you buy a call with a $160 strike at $3.50 premium and the stock rises to $175, your profit per share is $175 - $160 - $3.50 = $11.50, or $1,150 per contract (100 shares).
Put option profit = (Strike Price minus Current Stock Price minus Premium) multiplied by the Number of Shares. If the stock price falls below the strike price minus the premium, the put option is profitable. For example, a put with a $95 strike at $2.00 premium becomes profitable when the stock drops below $93 ($95 - $2 break-even).
For call options, the break-even price equals the Strike Price plus the Premium paid. For put options, it equals the Strike Price minus the Premium. This is the stock price at which your trade has zero profit and zero loss. Any price movement beyond the break-even in your favor generates profit.
A call option is 'in the money' (ITM) when the stock price is above the strike price. A put option is ITM when the stock price is below the strike price. In-the-money options have intrinsic value — meaning they would be worth exercising. The opposite, 'out of the money' (OTM), means the option has no intrinsic value.
The maximum loss when buying call or put options is always limited to the total premium paid. For example, if you buy 2 contracts at $3.00 per share, your maximum possible loss is $600 (2 contracts multiplied by 100 shares multiplied by $3.00). This is one of the key advantages of buying options versus trading stock directly.
The maximum profit on a call option is theoretically unlimited because a stock price can rise indefinitely. Your profit increases dollar-for-dollar with every point above the break-even price, multiplied by the number of shares you control. This asymmetric risk-reward profile is why many traders use call options.
The maximum profit on a put option occurs if the stock price drops to $0. The formula is (Strike Price minus Premium) multiplied by the Number of Shares. In practice, most traders close positions well before this extreme scenario. For example, a $95 strike put with $2 premium has a max profit of $93 per share, or $9,300 per contract.
One standard options contract represents 100 shares of the underlying stock. So if you buy 3 contracts, you control 300 shares. This leverage is what makes options powerful — a small premium can give you exposure to a large number of shares.
If an option expires out of the money (OTM), it becomes worthless and the buyer loses the entire premium paid. There is no obligation to exercise an OTM option. This is why it is critical to understand your break-even price and manage trades before expiration.
A call option gives you the right to buy stock at the strike price — it is a bullish bet. A put option gives you the right to sell stock at the strike price — it is a bearish bet. Both require paying a premium upfront. Call buyers profit when stocks rise; put buyers profit when stocks fall.
The options premium is the price you pay to buy an option contract. It consists of intrinsic value (how much the option is in the money) and extrinsic value (time value plus implied volatility). Factors affecting premium include: stock price relative to strike, time until expiration, implied volatility, interest rates, and dividends.
Return on Investment (ROI) for options is calculated as (Profit divided by Total Premium Paid) multiplied by 100 percent. For example, if you paid $500 in premiums and made $750 in profit, your ROI is 150 percent. Options can offer much higher ROI than stock trades due to the leverage effect, but they also carry higher risk.
Most traders sell the option contract rather than exercising it, because the contract may have remaining time value (extrinsic value). Exercising only captures intrinsic value, while selling captures both intrinsic and extrinsic value. Unless you specifically want to own the underlying shares, selling is usually more profitable.
Intrinsic value is the amount an option is in the money — for calls, it is Stock Price minus Strike Price; for puts, it is Strike Price minus Stock Price. Extrinsic value (time value) is the remaining premium above intrinsic value, influenced by time until expiration and implied volatility. As expiration approaches, extrinsic value decays (theta decay).
A covered call involves owning the underlying stock and selling a call option against it. You collect premium income but cap your upside at the strike price. It is a popular income-generating strategy for stocks you plan to hold long-term. If the stock stays below the strike price, you keep both the stock and the premium.