Options Trading Calculator

Options Profit/Loss Calculator

Long Call Long Put

Results Breakdown

Total Cost (Premium Paid):

Break-even Price:

Total Net Profit/Loss:

Percentage Return:

Understanding the Options Trading Calculator

This options trading calculator is designed to help traders visualize the potential outcome of long call and long put strategies. In options trading, understanding your break-even point and the impact of the "multiplier effect" (where 1 contract typically represents 100 shares) is crucial for risk management.

Key Variables Defined:

  • Strike Price: The fixed price at which the owner of the option can buy (Call) or sell (Put) the underlying stock.
  • Premium: The price you pay per share to purchase the option contract. If the premium is $2.00, one contract costs $200.
  • Break-even Point: For a Call, it is Strike + Premium. For a Put, it is Strike – Premium. This is the price the stock must reach for your profit to be zero.

Example Scenario: A Long Call

Imagine you buy 1 Call Option for Stock ABC with a Strike Price of $150. You pay a Premium of $3.00 per share. Your total investment is $300 ($3.00 x 100 shares).

If at expiration the stock is trading at $160, your option is "In the Money." You have the right to buy at $150 and could sell immediately at $160, making $10 profit per share. Subtracting your $3.00 premium, your net profit is $7.00 per share, or $700 total.

The Risk of Options

The maximum loss for a buyer of an option is limited to the total premium paid. This makes long options a "defined risk" strategy. However, if the stock price does not move past the strike price in the desired direction before expiration, the option can expire worthless, resulting in a 100% loss of the invested capital.

function calculateOptionsProfit() { var type = document.getElementById("optionType").value; var strike = parseFloat(document.getElementById("strikePrice").value); var premium = parseFloat(document.getElementById("premiumPrice").value); var contracts = parseInt(document.getElementById("contracts").value); var target = parseFloat(document.getElementById("targetPrice").value); if (isNaN(strike) || isNaN(premium) || isNaN(contracts) || isNaN(target)) { alert("Please enter valid numbers in all fields."); return; } var totalCost = premium * 100 * contracts; var breakEven = 0; var grossPL = 0; if (type === "call") { breakEven = strike + premium; var intrinsicValue = Math.max(0, target – strike); grossPL = intrinsicValue * 100 * contracts; } else { breakEven = strike – premium; var intrinsicValue = Math.max(0, strike – target); grossPL = intrinsicValue * 100 * contracts; } var netPL = grossPL – totalCost; var roi = (netPL / totalCost) * 100; // Update UI document.getElementById("resTotalCost").innerText = "$" + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resBreakEven").innerText = "$" + breakEven.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); var plElement = document.getElementById("resNetPL"); plElement.innerText = (netPL >= 0 ? "+" : "") + "$" + netPL.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); plElement.style.color = netPL >= 0 ? "#2e7d32" : "#d32f2f"; var roiElement = document.getElementById("resROI"); roiElement.innerText = roi.toFixed(2) + "%"; roiElement.style.color = roi >= 0 ? "#2e7d32" : "#d32f2f"; document.getElementById("optionResult").style.display = "block"; }

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