What the calculator shows
A single option leg has a payoff that depends only on the stock price on the expiry date, the strike and the premium. The calculator draws it and answers the questions traders ask before they trade: how much can I lose, how much can I make, where is the break-even, and what happens if the stock goes where I expect.
- Maximum loss and maximum profit. Buying an option loses at most the premium paid. Selling one makes at most the premium received, and its loss can be large: a short call has no cap, a short put loses at most the strike (less the premium) times 100 times the contracts.
- Break-even. For a call the stock must close above the strike plus the premium; for a put, below the strike minus the premium. Between the strike and the break-even a bought option finishes in the money and still loses money, because the premium has not been recovered.
- Profit or loss at your price. Enter the price you think the stock will reach and you get the dollar result and the result as a share of the premium.
- Chance of profit (model). If you give the days to expiry and the implied volatility, a Black-Scholes model estimates the chance that the stock closes beyond the break-even. It is a model estimate and not a forecast: it assumes smooth, lognormal price moves and the volatility you enter.
- The curve for today. The dashed curve shows what the same option would be worth today, as a profit or loss, at each stock price, with the days and volatility you gave. It sits above the payoff at expiry for a bought option because time value has not decayed yet.
The four single legs
For a stock at $100 and options struck at $100, with a call premium of $4.00 and a put premium of $3.50 (illustrative numbers), per contract of 100 shares:
| Position (stock at $100, strike $100) | Premium | Maximum profit | Maximum loss | Break-even at expiry |
|---|---|---|---|---|
| Buy a call | $4.00 | unlimited | $400 | $104 |
| Buy a put | $3.50 | $9,650 | $350 | $96.50 |
| Sell a call | $4.00 | $400 | unlimited | $104 |
| Sell a put | $3.50 | $350 | $9,650 | $96.50 |
The pairs are mirror images: what the buyer makes the seller loses, price for price. That is why selling options is not a free source of income: the premium is the best case, and the worst case is much larger. The same payoff arithmetic is behind the risk reward calculator: a bought call has a limited risk and an open reward, a short call the reverse.
A worked example: a call bought for $2.50
The stock is at $100. You buy one call with a $105 strike for $2.50 a share, which costs $250 for the 100 shares. The break-even is $105 + $2.50 = $107.50, a 7.5% rise from today. At expiry the profit or loss on one contract is:
| Stock price at expiry | Profit or loss on 1 contract | Share of the $250 premium |
|---|---|---|
| $90 | −$250 | −100% |
| $95 | −$250 | −100% |
| $100 | −$250 | −100% |
| $105 | −$250 | −100% |
| $107.50 | $0 | 0% |
| $110 | +$250 | +100% |
| $115 | +$750 | +300% |
| $120 | +$1,250 | +500% |
| $130 | +$2,250 | +900% |
Below $105 the option expires worthless and you lose the whole $250. At $110 the call is worth $5, so you recover $500 but paid $250, and profit +$250. At $115 the profit is +$750, 300% of the premium, and it keeps rising dollar for dollar above that. With a 30% implied volatility and 45 days to expiry, a Black-Scholes model puts the chance of closing above $107.50 at 24%: most of the time a bought out-of-the-money call loses its premium, and the occasional large win pays for it. Whether that is a good bet depends on whether your view is better than the price already in the option, which the model cannot tell you.
Why time matters before expiry
An option's price has two parts: intrinsic value (what it would be worth if exercised now) and time value (the chance that it gets more valuable before expiry). Time value falls to zero at expiry, and the fall speeds up at the end. The same $105 call, with the stock at $100 or at $110, volatility at 30% and a 4% interest rate:
| Days left | Option value, stock at $100 (per share) | Per contract | Stock at $110 (per share) | Per contract |
|---|---|---|---|---|
| 45 | $2.42 | $242 | $7.79 | $779 |
| 30 | $1.66 | $166 | $6.95 | $695 |
| 14 | $0.72 | $72 | $5.90 | $590 |
| 7 | $0.26 | $26 | $5.36 | $536 |
| 1 | $0.00 | $0 | $5.01 | $501 |
With the stock at $100 the call is worth $2.42 with 45 days left, $0.72 with 14 and almost nothing with a day left: a buyer who is right about the direction but too slow loses. With the stock at $110 the call has $5 of intrinsic value, and the time value shrinks from $2.79 to $0.01 over the same period. The calculator's "today" curve uses the same model, so you can see how far a stock has to move for the option to be profitable before expiry.
How many contracts?
For a bought option the premium is the risk, so sizing is simple: the number of contracts is the amount you are willing to lose divided by the premium times 100. For a $2.50 premium:
| Premium budget | Contracts at $2.50 a share ($250 each) |
|---|---|
| $250 | 1 |
| $500 | 2 |
| $1,000 | 4 |
| $2,500 | 10 |
Decide the amount with the same rule you use for any trade: a small share of the account per idea; see how much to risk per trade and the position size calculator. For sold options the risk is not the premium, so size from the worst case, not the credit. To check whether a record of option trades shows an edge, use is my edge real.
What the calculator does not include
- Commissions and fees per contract, which lower every result. Subtract them from the profit.
- Early exercise and assignment. American-style options can be exercised before expiry, and sold options can be assigned. The calculator shows the position held to expiry.
- Dividends, margin and taxes. The model ignores dividends. Margin required for sold options differs by broker and strategy. Tax treatment depends on where you live.
- Multi-leg strategies such as spreads and straddles. This tool is for single legs; for a spread, add the results of its legs.
- Real prices. The premium and the volatility are yours to enter. The page does not use live market data.
Options carry a high risk of loss, including the whole premium, and sold options can lose more than the premium. This page is education, not advice.
The formulas
profit or loss = payoff × 100 × contracts
break-even: call = K + premium, put = K − premium
maximum loss of a bought option = premium × 100 × contracts
Black-Scholes: call = S·N(d₁) − K·e−rT·N(d₂), put = K·e−rT·N(−d₂) − S·N(−d₁), d₁ = (ln(S/K) + (r + σ²/2)T) ÷ (σ√T), d₂ = d₁ − σ√T
chance of profit for a bought call = N((ln(S/break-even) + (r − σ²/2)T) ÷ (σ√T))S is the stock price, K the strike, T the years to expiry, r the interest rate, σ the implied volatility and N the normal distribution function.
Worked examples
Buy a call for $2.50
Stock $100, strike $105, 1 contract: costs $250, break-even $107.50, profit +$750 at $115.
Sell a put for $2.20
Stock $100, strike $95, premium $2.20, 1 contract: the most you make is $220. The break-even is $92.80, and below it you lose $100 for every dollar the stock falls, down to $9,280 at zero.
Buy a put as protection
Stock $100, strike $95, premium $2.20, 1 contract: the put costs $220 and pays when the stock closes below $92.80.
Frequently asked questions
How do you calculate options profit?
At expiry, a call is worth the stock price minus the strike (never below zero) and a put the strike minus the stock price (never below zero). Subtract the premium paid for a bought option, or take the premium as the starting gain for a sold one, and multiply by 100 shares and the number of contracts.
What is the break-even of a call or a put?
For a call the strike plus the premium, for a put the strike minus the premium. Between the strike and the break-even a bought option is in the money but still loses money.
What is the most I can lose buying an option?
The premium you paid, times 100 times the contracts. The loss cannot be larger, which is why bought options are sized by the premium.
Can I lose more selling options?
Yes. A short call has no cap on its loss. A short put loses at most the strike (less the premium) times 100 times the contracts. Risk is far above the premium received.
How is the chance of profit calculated?
With a Black-Scholes model: the chance that the stock closes beyond the break-even on the expiry date, given the days to expiry, the implied volatility and the interest rate you enter. It is a model estimate and not a forecast.
Does the calculator work before expiry?
Yes, as a model: the dashed curve is the profit or loss if you closed the position today at each stock price, using Black-Scholes and the volatility you enter. Real prices differ, especially in fast markets and for options with wide bid-ask spreads.
Is this financial advice?
No. It does arithmetic on the numbers you enter. Options carry a high risk of loss, and results depend on prices that this page does not know.
Options need a view on price. Indicators help you form one.
A call or put is a bet on where price goes and when. These indicators help you read price levels and momentum.
Last updated November 2026. For education only. Not financial advice. Results depend on your inputs and cannot predict future performance.