Long Options Calculator – Loan calculator

Long Options Profit/Loss Calculator

Option Type: Long Call Long Put

Current Underlying Price ($):

Option Strike Price ($):

Premium Paid Per Share ($):

Number of Option Contracts:

Hypothetical Price at Expiration ($):

Calculation Results:

function calculateLongOption() { var underlyingPrice = parseFloat(document.getElementById('underlyingPrice').value); var strikePrice = parseFloat(document.getElementById('strikePrice').value); var premiumPerShare = parseFloat(document.getElementById('premiumPerShare').value); var numContracts = parseInt(document.getElementById('numContracts').value); var expirationPrice = parseFloat(document.getElementById('expirationPrice').value); var optionTypeCall = document.getElementById('longCall').checked; if (isNaN(underlyingPrice) || isNaN(strikePrice) || isNaN(premiumPerShare) || isNaN(numContracts) || isNaN(expirationPrice) || underlyingPrice < 0 || strikePrice < 0 || premiumPerShare < 0 || numContracts < 1 || expirationPrice < 0) { document.getElementById('result').innerHTML = '

Please enter valid positive numbers for all fields. Number of contracts must be at least 1.

'; return; } var totalCost = premiumPerShare * numContracts * 100; var breakeven; var profitLossAtExpiration; var maxProfit; var maxLoss = totalCost; // Max loss is always the premium paid for long options if (optionTypeCall) { // Long Call breakeven = strikePrice + premiumPerShare; if (expirationPrice > strikePrice) { profitLossAtExpiration = (expirationPrice – strikePrice – premiumPerShare) * numContracts * 100; } else { profitLossAtExpiration = -totalCost; // If expires below strike, loss is total premium } maxProfit = "Unlimited"; } else { // Long Put breakeven = strikePrice – premiumPerShare; if (expirationPrice < strikePrice) { profitLossAtExpiration = (strikePrice – expirationPrice – premiumPerShare) * numContracts * 100; } else { profitLossAtExpiration = -totalCost; // If expires above strike, loss is total premium } maxProfit = (strikePrice – premiumPerShare) * numContracts * 100; // Max profit if underlying goes to 0 if (maxProfit < 0) maxProfit = 0; // Max profit cannot be negative, if strike – premium is negative, max profit is 0 (underlying cannot go below 0) } document.getElementById('totalCost').innerHTML = 'Total Cost of Options: $' + totalCost.toFixed(2); document.getElementById('breakevenPrice').innerHTML = 'Breakeven Price: $' + breakeven.toFixed(2); document.getElementById('profitLoss').innerHTML = 'Profit/Loss at Expiration Price: $' + profitLossAtExpiration.toFixed(2); if (maxProfit === "Unlimited") { document.getElementById('maxProfit').innerHTML = 'Maximum Profit: Unlimited'; } else { document.getElementById('maxProfit').innerHTML = 'Maximum Profit: $' + maxProfit.toFixed(2); } document.getElementById('maxLoss').innerHTML = 'Maximum Loss: $' + maxLoss.toFixed(2); } // Initial calculation on load window.onload = calculateLongOption;

Understanding Long Options: Calls and Puts

Options trading can be a powerful tool for speculation and hedging, offering leverage and defined risk in many strategies. A "long option" position refers to buying an option contract, either a call or a put. This calculator helps you understand the potential profit, loss, and breakeven points for these fundamental strategies.

What is a Long Call Option?

When you buy a call option (go "long a call"), you are purchasing the right, but not the obligation, to buy an underlying asset (like a stock) at a specific price (the "strike price") on or before a certain date (the "expiration date"). You pay a "premium" for this right.

Investors typically buy call options when they are bullish on an underlying asset, expecting its price to rise significantly above the strike price before expiration. The potential profit is theoretically unlimited, while the maximum loss is limited to the premium paid.

Key Characteristics of a Long Call:

Market View: Bullish (expecting price increase).
Maximum Profit: Unlimited (as the underlying price can rise indefinitely).
Maximum Loss: Limited to the premium paid for the option.
Breakeven Point: Strike Price + Premium Paid Per Share.

What is a Long Put Option?

When you buy a put option (go "long a put"), you are purchasing the right, but not the obligation, to sell an underlying asset at a specific price (the "strike price") on or before a certain date (the "expiration date"). Similar to calls, you pay a "premium" for this right.

Investors typically buy put options when they are bearish on an underlying asset, expecting its price to fall significantly below the strike price before expiration. Puts can also be used to hedge against potential losses in a stock portfolio.

Key Characteristics of a Long Put:

Market View: Bearish (expecting price decrease).
Maximum Profit: Limited (Strike Price – Premium Paid Per Share) * Number of Contracts * 100 (occurs if the underlying price falls to zero).
Maximum Loss: Limited to the premium paid for the option.
Breakeven Point: Strike Price – Premium Paid Per Share.

How to Use the Long Options Calculator:

This calculator helps you quickly assess the financial outcomes of buying a call or put option. Here's how to use it:

Select Option Type: Choose "Long Call" if you expect the underlying asset's price to rise, or "Long Put" if you expect it to fall.
Current Underlying Price: Enter the current market price of the stock or asset.
Option Strike Price: Input the strike price of the option contract you are considering.
Premium Paid Per Share: Enter the premium you paid (or would pay) for one share's worth of the option. Remember, one option contract typically covers 100 shares.
Number of Option Contracts: Specify how many option contracts you are buying.
Hypothetical Price at Expiration: Enter a potential price for the underlying asset at the option's expiration. This allows you to see the profit/loss at different price points.
Click "Calculate Profit/Loss": The calculator will instantly display your total cost, breakeven price, profit/loss at your hypothetical expiration price, maximum potential profit, and maximum potential loss.

Example Scenarios:

Long Call Example:

Let's say you are bullish on Stock XYZ, currently trading at $100. You buy 1 call option contract with a strike price of $105, paying a premium of $2.50 per share. You believe the stock will reach $110 by expiration.

Option Type: Long Call
Current Underlying Price: $100
Option Strike Price: $105
Premium Paid Per Share: $2.50
Number of Option Contracts: 1
Hypothetical Price at Expiration: $110

Results:

Total Cost of Options: $2.50 * 1 * 100 = $250.00
Breakeven Price: $105 (Strike) + $2.50 (Premium) = $107.50
Profit/Loss at $110: ($110 – $105 – $2.50) * 1 * 100 = $250.00 Profit
Maximum Profit: Unlimited
Maximum Loss: $250.00

Long Put Example:

You are bearish on Stock ABC, currently trading at $50. You buy 2 put option contracts with a strike price of $45, paying a premium of $1.75 per share. You expect the stock to drop to $40 by expiration.

Option Type: Long Put
Current Underlying Price: $50
Option Strike Price: $45
Premium Paid Per Share: $1.75
Number of Option Contracts: 2
Hypothetical Price at Expiration: $40