How to use it
- Choose call or put, and buy or sell.
- Enter the strike, the premium per share, the number of contracts and the shares per contract (100 for standard US equity options).
- Enter the stock price you expect at expiration. The chart shows the result at every price from 0 upwards.
How it works
At expiration a call is worth max(S − K, 0) per share and a put max(K − S, 0), where S is the stock price and K the strike.
- Buyer’s profit = (value − premium) × contracts × shares per contract.
- Seller’s profit = (premium − value) × contracts × shares per contract.
- Break-even: K + premium for a call, K − premium for a put.
- Long call: loss limited to the premium, profit unlimited. Long put: loss limited to the premium, profit at most (K − premium) × shares.
- Short call: profit limited to the premium, loss unlimited. Short put: profit limited to the premium, loss at most (K − premium) × shares.
Worked example
You buy 1 call with a 100 strike for 5 per share (100 shares per contract), paying 500. If the stock ends at 115, the call is worth 15, so the profit is (15 − 5) × 100 = 1,000, which is 200% of the premium. The break-even is 105; below 100 you lose the whole 500.
Tips
- The premium is quoted per share; one standard contract costs 100 times that.
- Selling options brings in the premium upfront but can lose far more than it earns, especially naked calls.
- Options are risky and can expire worthless. This tool only does the arithmetic and is not financial advice.