Important information: Powered by Finder.com. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.
Evaluating the risk/reward profile of a trade is an important part of trading options, helping you optimize your strategies and make informed investment decisions.
Our investment calculator helps you estimate profits and losses for call options and put options by considering various factors, such as strike price, premium, share price and the number of contracts.
Input your details to quickly see the potential outcomes of your options trades.
Options Investment Calculator
Estimated profit/loss at expiry: $0.00
This calculator is for illustrative purposes only, does not guarantee future performance, and should not be taken as financial advice. Results are estimates at expiry based on your inputs and exclude fees, commissions, and taxes. Options trading carries significant risk, including losing your entire investment. Consider your financial situation and consult a licensed advisor before trading.
How to use this options calculator
Enter the following details to estimate your options profit or loss at expiry:
- Option Type. Choose a call option or a put option, depending on your strategy.
- Strike Price. Enter the option contract’s strike price. This is the price you can buy the stock at (call) or sell it at (put).
- Premium Paid (per share). Enter the premium you paid per share. This is the quoted option price, not the total cost of the contract.
- Share Price at Expiry. Enter the share price you expect the stock to be at when the option expires.
- Number of Contracts. Enter how many contracts you’re buying. Each contract covers 100 shares.
- Calcualte. Select Calculate Profit to see your estimated profit or loss.
Call options profit formula
Use the following formula to calculate the potential profit from a call option, assuming it’s in the money at expiration:
Profit = (Stock Price at Expiration – Strike Price – Premium Paid) × Number of Contracts × 100
If the stock price at expiration is below or equal to the strike price, the option expires out of the money. The profit is the negative of the premium paid because the option expires worthless.
Put options profit formula
Use the following formula to calculate the potential profit from a put option, assuming it’s in the money at expiration:
Profit = (Strike Price – Stock Price at Expiration – Premium Paid) × Number of Contracts × 100
If the stock price at expiration is above or equal to the strike price, the option expires out of the money. The profit is the negative of the premium paid since the option expires worthless.
The basics of options trading
Options trading is a strategy that gives you the flexibility to buy or sell a stock at a set price within a specific timeframe, which can be a powerful tool for both managing risk and pursuing bigger returns.
It’s different from regular stock trading because it lets you speculate on price movements or protect your investments with more precision.
You might buy a call option if you believe the price of a stock will rise above the option’s strike price before the option expires. This allows you to purchase the stock at a lower price and potentially sell it at a higher market value for a profit.
On the other hand, you might buy a put option if you believe the price of a stock will decline before the option expires. This gives you the right to sell the stock at a higher strike price, which can either protect your investment from losses or allow you to profit from the drop in the stock’s value.
If you’re looking to understand options trading, finding the right platform and exploring options trading strategies are key to getting started.
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