function calculateOptionProfit() {
var type = document.getElementById('optionType').value;
var side = document.getElementById('positionSide').value;
var strike = parseFloat(document.getElementById('strikePrice').value);
var premium = parseFloat(document.getElementById('premium').value);
var target = parseFloat(document.getElementById('targetPrice').value);
var qty = parseFloat(document.getElementById('contractQty').value);
var sharesPerContract = 100;
if (isNaN(strike) || isNaN(premium) || isNaN(target) || isNaN(qty)) {
alert("Please enter valid numerical values.");
return;
}
var totalCost = premium * qty * sharesPerContract;
var breakeven = 0;
var profitPerShare = 0;
if (type === 'call') {
breakeven = strike + premium;
if (side === 'long') {
profitPerShare = Math.max(0, target – strike) – premium;
} else {
profitPerShare = premium – Math.max(0, target – strike);
}
} else { // Put
breakeven = strike – premium;
if (side === 'long') {
profitPerShare = Math.max(0, strike – target) – premium;
} else {
profitPerShare = premium – Math.max(0, strike – target);
}
}
var totalProfit = profitPerShare * qty * sharesPerContract;
var roi = side === 'long' ? (totalProfit / totalCost) * 100 : (totalProfit / (strike * qty * sharesPerContract)) * 100;
document.getElementById('totalPremiumDisplay').innerText = "$" + totalCost.toFixed(2);
document.getElementById('breakevenDisplay').innerText = "$" + breakeven.toFixed(2);
document.getElementById('grossProfitDisplay').innerText = "$" + totalProfit.toFixed(2);
document.getElementById('roiDisplay').innerText = roi.toFixed(2) + "%";
var outcomeDiv = document.getElementById('finalOutcome');
outcomeDiv.innerText = totalProfit >= 0 ? "Net Profit: $" + totalProfit.toFixed(2) : "Net Loss: $" + Math.abs(totalProfit).toFixed(2);
outcomeDiv.style.backgroundColor = totalProfit >= 0 ? "#d4edda" : "#f8d7da";
outcomeDiv.style.color = totalProfit >= 0 ? "#155724" : "#721c24";
document.getElementById('resultArea').style.display = 'block';
}
How to Use the Option Profit Calculator
Options trading can be complex, but calculating your potential return at expiration doesn't have to be. This tool helps traders visualize the outcome of their trades based on the strike price, premium paid or received, and the movement of the underlying stock price.
Key Definitions
Strike Price: The set price at which an option contract can be exercised.
Premium: The price paid (for buyers) or received (for sellers) per share. Remember, 1 contract usually represents 100 shares.
Long Call: A bullish strategy where you profit if the stock price rises above the strike price plus the premium.
Long Put: A bearish strategy where you profit if the stock price falls below the strike price minus the premium.
Break-even Point: The specific stock price where the trade results in $0 profit and $0 loss.
Example Calculation
Suppose you buy 1 Call Option (Long) for a tech stock:
Strike Price: $150
Premium: $5.00 ($500 total cost for 100 shares)
Stock Price at Expiration: $165
Result: At $165, the option is worth $15 per share ($165 – $150). After subtracting the $5 premium you paid, your profit is $10 per share, or $1,000 total. Your break-even point in this scenario would be $155 ($150 strike + $5 premium).
Risk vs. Reward
When buying options (Long), your maximum risk is limited to the premium paid. However, when selling options (Short), the risk can be significantly higher—especially with "naked" calls where the potential loss is theoretically unlimited if the stock price continues to climb. Always use stop-losses and understand the "Greeks" before entering live trades.