Option payoff calculator

What an option payoff shows

An option's payoff is what it is worth on the day it expires, set against what you paid or received for it. It is the simplest picture of an option's risk: how far the stock has to move before you make money, and how much you can lose if it does not. It leaves out everything that happens before expiration, which is where pricing models come in; use the Black-Scholes calculator for that.

Formulas

• Call at expiration (per share, buyer) = max(stock − strike, 0) − premium.
• Put at expiration (buyer) = max(strike − stock, 0) − premium.
• Seller (writer): the same with the opposite sign.
• Per contract = per share × 100 shares × number of contracts.
• Several options: add the results of each; the total is a line made of straight pieces that bend at the strikes, so we find the break-evens and the largest and smallest values at the strikes (our method).

Worked example

Following the SEC's example, you buy a call with a $70 strike for $2.20 a share, $220 per contract. Break-even is $72.20. If the stock is $80 at expiration, the call is worth $10 a share, your profit is $7.80 a share, or $780 per contract. If it is $70 or less, the option expires worthless and you lose the $220. The SEC's bulletin shows $800 for the same move because it sells the option before expiration, at a premium of $10.20. These are example numbers, not predictions.

Common mistakes and limits

• Forgetting the multiplier. A $2.20 quote is $220, not $2.20.
• Reading break-even as "in the money". The option is in the money when the stock is beyond the strike, but profitable only beyond the break-even (strike ± premium).
• Comparing expiration payoff with today's price. Before expiration the option has time value and can be sold for more or less than this line shows.
• Overlooking assignment. A seller can be assigned when the buyer exercises, before expiration in the case of American-style options.
• Selling calls without cover. A short call loses without limit as the stock rises: −$7.80 per share if the stock reaches $80 in the example.

How do you calculate the break-even of a call or put?

For a bought call, break-even at expiration is the strike plus the premium; for a bought put, the strike minus the premium. The SEC's Investor Bulletin uses a call with a $70 strike bought for $2.20: the stock has to rise to $72.20 for the buyer to break even, and for the same put the stock has to fall to $67.80. For a seller the break-even is the same price, with the profit and loss reversed. For spreads and combinations, the calculator finds every price where the profit line crosses zero: a long straddle with a $100 strike, $3 for the call and $2 for the put has break-evens at $95 and $105.

Why is one contract 100 shares?

A standard listed stock option generally covers 100 shares of the underlying stock, so a quoted premium is multiplied by 100. In the SEC bulletin, a premium of $2.20 is a payment of $220 per contract. The same multiplier turns a per-share profit into a per-contract figure: $7.80 at expiration per share is $780 per contract. Adjusted contracts (after a split or a merger) can cover a different number of shares; the calculator lets you change the multiplier by using fewer or more contracts.

What is the most I can lose or make?

A buyer risks the premium: $220 per contract in the $70 call example, and that is the loss if the option expires worthless. The SEC bulletin says that if the option expires out of the money, the entire premium is lost. A long call has no upper limit on profit, while a long put's profit is limited because a stock cannot fall below zero: $6,780 per contract here. A writer (seller) has the reverse: the premium is the maximum profit, $220 in the $70 call example, and for a short call the loss has no upper limit as the stock rises. The SEC notes that writers can face an even higher level of risk than buyers.

How do spreads change the numbers?

A vertical spread combines a bought and a sold option of the same type, with different strikes. Buying the $70 call at $2.20 and selling the $75 call at $0.90 costs $1.30 per share, puts the break-even at $71.30 and caps the profit at $370 per contract and the loss at $130. Selling the higher call gives up profit above $75 in return for a lower cost. Enter the two legs with the "Two options" button to see any combination, including collars, straddles and strangles. The example premiums are illustrations and not quotes.

What does at-expiration mean?

The table shows the result if you hold the option until it expires and the stock closes at each price. Before expiration the option still has time value, so its price is higher than this payoff line, and it moves with volatility, interest rates and dividends, which this page does not model. For that, see the Black-Scholes calculator. The SEC bulletin describes the buyer's right as one that can be exercised at any time before the option's expiration date, so the holder can also sell the option, or exercise it, before then; the page ignores early exercise and assignment.

Do commissions and taxes matter?

Yes, and neither is in the figures. Commissions and fees add to your cost; the SEC bulletin's examples leave them out, and so does this page. Taxes on options depend on your holding period, the type of option and on how the contract ends (sold, exercised, assigned or expired). Ask your broker for the tax treatment and your tax professional for the rest.

Is this an options strategy recommendation?

No. The page does arithmetic on numbers you type in. It does not tell you whether an option is fairly priced, whether the stock will move, or whether a strategy suits you. Options carry no guarantees and it is possible to lose all of an initial investment, as the SEC bulletin states. The SEC points readers to the OCC document Characteristics and Risks of Standardized Options for the risks of options trading; we did not open that document for this page.

For education only — not investment advice. Options involve risk and are not suitable for everyone; you can lose all of your initial investment, and writers can lose more. Read the options disclosure document before trading. How we check our calculators.

Sources, checked October 28, 2026: SEC Office of Investor Education and Assistance, Investor Bulletin: An Introduction to Options (terms, 100-share contract, premium, break-even and risk examples). The Options Clearing Corporation document Characteristics and Risks of Standardized Options, which the bulletin recommends, was not opened for this page. Related: Black-Scholes calculator, dividend calculator, stock average calculator and forex pip value calculator. How we check our calculators.