Evaluating the risk/reward profile of a trade is an important part of trading options, helping you make more informed decisions and optimize your strategies.
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 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.
eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finder is not an affiliate and may be compensated if you access certain products or services offered by the BD.
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Frequently asked questions
The break-even price is the stock price at expiration where your option trade results in zero profit or loss (ignoring commissions). For a long call, the break-even price is the strike price plus the premium you paid. For a long put, the break-even price is the strike price minus the premium you paid.
The stock must move beyond this point in your favor for the trade to become profitable.
It expires worthless. As the buyer, you lose only the premium you paid. No further action is required.
Matt Miczulski is an investments editor and market analyst at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on Yahoo Finance, CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.
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