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: $0.00
How to use this calculator
Enter the following details to estimate your options profit or loss:
- Option Type. Choose between a call option or a put option, depending on your strategy.
- Strike Price. Enter the option contract’s strike price, which is the price you can buy or sell the stock.
- Premium Paid. Enter the premium, which is the price you pay for the contract.
- Share Price. Enter the stock’s projected share price at expiration.
- Number of Contracts. Enter the number of contracts you’d like to purchase.
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.
Compare options trading platforms in Canada
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Finder Score for stock trading platforms
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score, the better the platform—it's that simple.
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