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Stock Options Calculator:
Calculate Your Investment Profit
How to Use the Stock Options Calculator
The Stock Options Calculator shows you profit and loss scenarios for buying call options and put options. It's easy to use, it's free, and only requires a few pieces of information.
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1
Choose whether you are buying a call option or put option.
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2
Input the option expiration date. This is optional, as it will not affect the calculation.Type the option strike price.
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Key in the number of options contracts. This will affect the cost and total profit.
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Input the price per share of the option. This is how option prices are typically quoted on financial websites and trading platforms.
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Total Cost is calculated for you. The total cost of each contract is the option price x 100 shares, since contracts are for 100 shares.
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6
Input the current price of the stock.
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Insert the Estimated Stock Price at Expiration. This is the target price you think the stock may trade at prior to expiration. Input different estimates to see various profit and loss scenarios.
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Expected Change is calculated for you. It’s the percentage and dollar difference between the Estimated future stock price and the Current stock price.
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Total Return on Option is calculated for you and is the dollar profit you make over and above the cost. It also shows the percentage difference between your profit and cost.
Basic Guide to Understanding Stock Options
Buying a stock option gives the option holder the right to buy (call option) or sell (put option) the underlying stock at a specified price (strike price) by a certain date (expiration date).
Explanation of Call Options
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Suppose a stock is trading at $48, and you believe it will rise in the next few months.
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You buy a call option with a strike price of $50 and an expiration date three months from now.
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For this option, you pay a fee (called the premium) of $1 per share. The option contract covers 100 shares, so the option costs you $100. Regardless of what the underlying stock price does, $100 is the maximum you can lose on this trade. If you buy two contracts, the cost is $200 ($1 premium x 200 shares).
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The price (premium) of your option will fluctuate until expiration. So, you can sell your option at any time to lock in your profit or loss.
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If the stock price rises, your option will likely increase in value. Your potential profit is unlimited.
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If the stock price falls, your option becomes less valuable. At expiration, if the stock price is below $50, it is worthless.
Here are the scenarios that might unfold, with further explanations below:
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The stock price at expiration is $51: this is your break-even point.
The stock price is above $51 at expiration: you make a profit beyond your costs.
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The stock price is below $50 at expiration: the option becomes worthless, and you lose the $100 spent on it.
The stock is in the range of $50.01 to $50.99 at expiration: you have partial losses from the $100 spent on the option.
As the expiration date approaches, if the stock is trading at $55, your option will likely have a premium of around $5. Because this is its value. It gives you the right to buy stock at $50 when the stock is worth $55. This is a $5 advantage. You only paid $1 for the option contract, so your net profit is $400 (($5-$1) x 100 shares).
What if the stock rises only a little? You paid $1 for the option, with a strike price of $50. Add these two amounts together to get the break-even point: $51. The stock price needs to rise above $51 for you to profit.
If the stock price doesn’t rise above $51, you can sell the option for whatever you can get to minimize your losses.
If the stock trades at $50 or below at expiration, the option is worthless because it gives no advantage. You lose the $100 spent on the option, no matter how far the stock price falls below $50.
Explanation of Put Options
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Suppose a stock is trading at $33, and you think it will drop in the next month.
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You could buy a put option with a strike price of $30 and an expiration date one month from now.
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Assume the premium is $1, meaning a cost of $100 per contract. When buying one contract, this is your maximum loss risk on the trade.
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If the stock price falls, your option increases in value.
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If the stock price rises, the put option becomes less valuable. At expiration, if the stock price is above $30, the put option is worthless.
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Here are the scenarios that might unfold, with further explanations below:
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The stock price is $29 at expiration: this is your break-even point.
The stock price is below $29 at expiration: you make a profit beyond your costs.
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The stock price is above $30 at expiration: the option becomes worthless, and you lose the $100 spent on it.
The stock is in the range of $29.01 to $29.99 at expiration: you have partial losses from the $100 spent on the option.
If the stock falls below $30, your option has some value, but it may not be enough to cover the $1 ($100) you paid.
The price needs to fall below $29 for you to earn more than you paid. The further the stock falls below $29, the greater your profit from the put option. If the stock falls to $26, your put option is worth $4 ($30 - $26), but you paid $1 for it. You net a profit of $3 or $300 per contract.
If the stock price stays above $30, the option provides no advantage. For example, if the stock is trading at $31 at option expiration, the put option will be worthless. No one wants the right to sell stock at $30 when it can be sold at the current market price of $31. The option becomes worthless, and the $100 spent on the option is lost.
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const calcIframe = document.getElementById('stock-option-calculator');
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Success Stories from Our Clients
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John Anderson
Excellent Tool for Traders
This stock options calculator is a must-have for anyone trading options. It’s straightforward to use and helps me calculate potential profit and loss before making trades. Highly recommended! -
Alex Noon
Accurate and Simple
love how easy it is to input data and get instant results. The calculator gives clear breakdowns of potential returns and risks. A great resource for anyone in the options market. -
Emma Petterson
Perfect for Planning Trades
The site offers an intuitive stock options calculator that lets you predict outcomes quickly. I use it to plan my trades and reduce the risks involved. It’s saved me a lot of time! -
David Lite
A Great Educational Tool
As someone new to stock options, this calculator has been a game changer. It helps me understand the potential risks and rewards, making it easier to make informed decisions. -
Rachel Simpson
Easy to Navigate and Accurate
This site makes calculating stock option values a breeze. It’s very user-friendly, and the calculations are precise. It’s now part of my daily trading routine. -
Alex Caron
Simple Yet Powerful
I was looking for a reliable calculator to estimate my stock options’ value. This one exceeded my expectations with its simplicity and effectiveness. A must for any options trader! -
Sophie Kyle
Highly Efficient
The stock options calculator on this site is incredibly fast and provides all the necessary details to make an informed decision. It’s my go-to tool before entering any trade. -
Emily Siemens
Helpful for Risk Management
I rely on this calculator to gauge the risk-to-reward ratio for my trades. It’s been crucial in helping me avoid bad trades and focus on the profitable ones. -
Michael Lesly
User-Friendly and Detailed
I’ve been using this stock options calculator for a while, and it’s always accurate. It’s so easy to input your option details and get results instantly! -
Chris Howard
Great Resource for Beginners
As a beginner, I find the stock options calculator very helpful. It’s easy to understand and gives me a clear idea of what to expect with my trades. -
Nick Robinson
Essential for Serious Traders
I’ve been trading options for years, and this calculator is an essential tool in my strategy. It simplifies complex calculations and gives reliable results. -
Tom Green
Efficient for All Option Types
Whether you’re calculating calls or puts, this tool handles everything with ease. It’s a fantastic resource for options traders looking to maximize their returns.
F.A.Q on Option Trading
Here are the scenarios that might unfold, with further explanations below:
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What is Option Exercise?
Exercising an option is when you take delivery of the position the option gives you the right to. Most options are not delivered. Rather, you just sell the option if it shows you a profit. If a call option has a strike price of $50 and the stock price is at $55 at expiration, you can sell your option to realize your profit on the option, or, you can exercise your option and receive 100 shares of the stock at $50. Most brokers charge a fee for exercising an option.
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What is Option Assignment?
If you buy an option, someone else “wrote” that option. They receive the premium you paid for the option. That is their maximum profit, so they are usually hoping that the option expires worthless and they get to keep the whole premium as profit. The writer of the option has the obligation to deliver the shares/position to you if you choose to exercise your option
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How Are Option Premiums Determined?
The premium of an option is determined by “the Greeks”. These are variables that affect the price of the option. At expiration, the only thing that matters is the price of the underlying relative to the strike price, but up until expiration, the price of the option is based on other factors such as the volatility of the underlying, how long there is till expiration (called “time value”), and other factors.
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What Are "In the Money" and "Out of the Money" Options?
For a call, if the stock price is already above the strike price, that is called “in the money”. If the stock price is below the strike price, the option is “out of the money”. For a put, if the stock price is below the strike price, the option is in the money. If the stock price is above the strike price the option is out of the money.
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Is Option Trading Better Than Stocks?
Options are a different way to trade compared to buying or shorting stocks directly on the stock exchange. One market isn’t better or worse. Both have advantages and disadvantages. With buying options you pay an upfront premium (cost) and have an expiry date, but can make large percentage returns if the underlying asset does what you expect as they have a leveraged nature. With stocks you own the asset, don’t have an expiry, but have to lay out all the capital for the trade (not just a premium, which is typically a tiny fraction of the stock price).
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What’s the Difference Between Option Volume and Open Interest?
Options volume is the number of contracts that change within a given period of time, such as a day. This is called daily options volume. Open interest is how many contracts are outstanding or are open. Option trades are marked “to open” or “to close” which means you are either buying or selling to open or close your position. Existing open positions, plus new option positions, less closed positions create open interest. Open interest is different from options volume.
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