Option Profit / Loss Calculator

Short option positions have a maximum gain capped at the premium received, the line flattens at that level because no matter how favorable the underlying moves, you cannot collect more than what you were paid. For a short call, the flat region is to the left of the strike; for a short put, it's to the right. Beyond that region, the line slopes downward (short call) or was already sloping down (short put) showing increasing losses as the option moves into the money against you.

Options are quoted on a per-share basis, but one standard equity option contract covers 100 shares. If an option's premium is $5.00, the cost to buy one contract is $5.00 × 100 = $500. The calculator shows both: P&L per share matches the option's quoted prices, while P&L per contract is the actual dollar gain or loss on a single standard contract (per share × 100).

A covered call combines long stock with a short call. The effective breakeven is the stock purchase price minus the call premium received. Example: stock purchased at $150, sold a $160 call for $4.00, breakeven on the combined position is $150 − $4.00 = $146.00. This calculator shows the option leg's breakeven in isolation (short call breakeven = $164). For the combined stock + option position, subtract the premium from your stock cost basis manually.

A long call becomes profitable only when the underlying exceeds the breakeven (strike + premium), not just the strike. If you paid $5.00 for a $150 call, the call is in the money when the stock is above $150. But you only break even at $155 and profit only above $155. The option's intrinsic value must exceed the premium paid to produce a net gain at expiration.

Yes for ETF options (SPY, QQQ, IWM), which use the same 100-share multiplier and cash values as equity options. For broad index options like SPX or NDX, the contract multiplier is $100 per index point, the calculator's "per share" output effectively represents "per index point" for these instruments, and the "per contract" figure (×100) correctly reflects the dollar P&L. Verify multipliers for non-standard contracts with your broker.

An expiration payoff chart answers one question only: what the position is worth once no time remains. At that point every option is worth its intrinsic value, which is why the lines are straight and meet at sharp corners at the strikes. Before expiration the position's value curves above those lines by the remaining time value, so a trade showing a loss on the expiration diagram can be closed for less of a loss today. The diagram is a boundary condition, not a picture of the position's current value.

Every cost paid pushes breakeven further into profitable territory. For a long option, commissions and exchange fees add to the effective premium, so the underlying must travel slightly further before the position is even. For a short option they reduce the credit received. Because listed options are usually charged per contract, the effect is proportionally largest on cheap contracts, where a per-contract fee can be a meaningful share of the premium. Closing the position adds a second round of the same costs unless it is left to expire.

The payoff calculation assumes the position runs to expiration, so early exercise breaks its assumptions in two ways. The holder gives up whatever time value the option still carried, receiving only intrinsic value. And for a writer, early assignment converts the option into a stock position before the expected date, changing the capital required and the exposure from that moment forward. American-style options can be exercised on any business day, so this is a live possibility rather than an edge case.

Because a share price cannot go below zero. A short put obliges the writer to buy at the strike, so the worst case is buying worthless shares at that strike, and the loss is capped at the strike multiplied by the contract size, less the premium received. A short call has no equivalent ceiling, since there is no upper bound on a share price. The two are often described together as undefined risk, but only the call side is genuinely unbounded.