Calculate potential profits, losses, and break-even prices for call and put options
A call option gives you the right to buy a stock at a specific price (strike price). You profit when the stock price rises above your strike price plus the premium paid. Use calls when you're bullish on a stock.
A put option gives you the right to sell a stock at a specific price (strike price). You profit when the stock price falls below your strike price minus the premium paid. Use puts when you're bearish on a stock.
Strike Price
The price at which you can buy (call) or sell (put) the underlying stock.
Premium
The price you pay per share to buy the option contract.
Break-Even Price
The stock price at which your option trade neither profits nor loses money.
Contract Size
Each options contract represents 100 shares of the underlying stock.
In the Money (ITM)
When an option has intrinsic value. Calls: stock > strike. Puts: stock < strike.
Out of the Money (OTM)
When an option has no intrinsic value. Calls: stock < strike. Puts: stock > strike.
For call options: Profit = (Stock Price - Strike Price - Premium) × 100 × Number of Contracts.
For put options: Profit = (Strike Price - Stock Price - Premium) × 100 × Number of Contracts.
The option must be "in the money" to have intrinsic value.
When buying options (calls or puts), your maximum loss is limited to the premium paid. This is the total cost of the option contracts. Unlike selling options, buying options has defined risk.
The break-even price is where your option trade results in zero profit or loss. For calls: Break-even = Strike Price + Premium. For puts: Break-even = Strike Price - Premium. The stock must move beyond this price for you to profit.
ITM options cost more but have higher probability of profit. OTM options are cheaper but require larger price moves to profit. ITM options have intrinsic value while OTM options are pure time value. Your choice depends on your risk tolerance and market outlook.
Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Options trading involves significant risk and is not suitable for all investors. Past performance does not guarantee future results. Please consult a qualified financial advisor before making investment decisions.