The four basic option positions
| Position | You expect | Max profit | Max loss |
|---|
| Buy a call | Price rises | Unlimited | Premium paid |
| Buy a put | Price falls | Strike − premium | Premium paid |
| Sell a call | Price stays flat or falls | Premium received | Unlimited (if uncovered) |
| Sell a put | Price stays flat or rises | Premium received | Strike − premium |
Reading the payoff chart
The chart shows your profit or loss (up and down) for each possible stock price at expiration (left to right). Where the line crosses zero is your break-even. The dashed line marks the price you entered. A long call's line is flat at the premium loss below the strike, then rises one dollar per dollar of stock price (times 100 per contract) above it.
Important risks
Options can expire worthless, and selling uncovered calls can lose more than you invest. Many brokers require approval levels for each strategy. This tool is for education and planning; it is not investment advice. For share trades, use the stock profit calculator.
Last reviewed October 2026.
Frequently asked questions
How is profit on a call option calculated?
At expiration, a long call is worth the stock price minus the strike price (or zero if the stock is below the strike). Profit = (value − premium paid) × 100 × number of contracts. For example, a $100 call bought for $5 makes $1,500 per contract if the stock ends at $120: ($20 − $5) × 100.
What is the break-even price for an option?
For a call it is the strike plus the premium; for a put it is the strike minus the premium. The stock has to move past that point by expiration for a buyer to profit.
What is the maximum loss when buying options?
When you buy a call or put, the most you can lose is the premium you paid. When you sell (write) a call without owning the stock, the potential loss is unlimited; when you sell a put, the maximum loss is the strike minus the premium, times 100, if the stock goes to zero.
Does this include time value before expiration?
No. This calculator shows profit and loss at expiration only, when an option is worth just its intrinsic value. Before expiration, option prices also include time value and depend on volatility, so you would need a pricing model like Black-Scholes.
Why multiply by 100?
One standard US equity option contract covers 100 shares. Premiums are quoted per share, so a $2.50 premium costs $250 per contract.