Options Calculator

Options Profit/Loss Calculator

function calculateOptionsProfitLoss() { var optionType = document.querySelector('input[name="optionType"]:checked').value; var positionType = document.querySelector('input[name="positionType"]:checked').value; var strikePrice = parseFloat(document.getElementById('strikePrice').value); var premiumPerShare = parseFloat(document.getElementById('premiumPerShare').value); var underlyingPrice = parseFloat(document.getElementById('underlyingPrice').value); var numContracts = parseInt(document.getElementById('numContracts').value); if (isNaN(strikePrice) || strikePrice <= 0) { document.getElementById('result').innerHTML = 'Please enter a valid Strike Price.'; return; } if (isNaN(premiumPerShare) || premiumPerShare <= 0) { document.getElementById('result').innerHTML = 'Please enter a valid Premium per Share.'; return; } if (isNaN(underlyingPrice) || underlyingPrice <= 0) { document.getElementById('result').innerHTML = 'Please enter a valid Underlying Price at Expiration.'; return; } if (isNaN(numContracts) || numContracts <= 0) { document.getElementById('result').innerHTML = 'Please enter a valid Number of Contracts.'; return; } var profitLossPerShare = 0; var breakEvenPrice = 0; var sharesPerContract = 100; // Standard for equity options if (optionType === 'call') { if (positionType === 'buy') { // Long Call profitLossPerShare = Math.max(0, underlyingPrice – strikePrice) – premiumPerShare; breakEvenPrice = strikePrice + premiumPerShare; } else { // Short Call profitLossPerShare = premiumPerShare – Math.max(0, underlyingPrice – strikePrice); breakEvenPrice = strikePrice + premiumPerShare; } } else { // Put option if (positionType === 'buy') { // Long Put profitLossPerShare = Math.max(0, strikePrice – underlyingPrice) – premiumPerShare; breakEvenPrice = strikePrice – premiumPerShare; } else { // Short Put profitLossPerShare = premiumPerShare – Math.max(0, strikePrice – underlyingPrice); breakEvenPrice = strikePrice – premiumPerShare; } } var totalProfitLoss = profitLossPerShare * sharesPerContract * numContracts; var resultHTML = '

Calculation Results:

'; resultHTML += 'Total Profit/Loss: = 0 ? 'green' : 'red') + ';">$' + totalProfitLoss.toFixed(2) + ''; resultHTML += 'Break-even Price: $' + breakEvenPrice.toFixed(2) + "; document.getElementById('result').innerHTML = resultHTML; } .calculator-container { font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif; background-color: #f9f9f9; border: 1px solid #ddd; border-radius: 8px; padding: 25px; max-width: 500px; margin: 20px auto; box-shadow: 0 4px 12px rgba(0, 0, 0, 0.08); } .calculator-container h2 { text-align: center; color: #333; margin-bottom: 25px; font-size: 1.8em; } .calc-input-group { margin-bottom: 18px; display: flex; flex-wrap: wrap; align-items: center; } .calc-input-group label { flex: 1 1 180px; color: #555; font-size: 1.05em; margin-right: 10px; } .calc-input-group input[type="number"] { flex: 2 1 200px; padding: 10px 12px; border: 1px solid #ccc; border-radius: 5px; font-size: 1em; box-shadow: inset 0 1px 3px rgba(0, 0, 0, 0.06); -moz-appearance: textfield; /* Firefox */ } .calc-input-group input[type="number"]::-webkit-outer-spin-button, .calc-input-group input[type="number"]::-webkit-inner-spin-button { -webkit-appearance: none; margin: 0; } .calc-input-group input[type="radio"] { margin-left: 15px; margin-right: 5px; transform: scale(1.1); } .calc-input-group input[type="radio"] + label { flex: 0 0 auto; margin-right: 15px; } button { display: block; width: 100%; padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 5px; font-size: 1.1em; cursor: pointer; transition: background-color 0.3s ease, transform 0.2s ease; margin-top: 20px; } button:hover { background-color: #0056b3; transform: translateY(-2px); } .calc-result { margin-top: 30px; padding: 15px; background-color: #e9f7ef; border: 1px solid #d4edda; border-radius: 8px; text-align: center; font-size: 1.1em; color: #333; } .calc-result h3 { color: #28a745; margin-top: 0; margin-bottom: 10px; font-size: 1.4em; } .calc-result p { margin: 8px 0; } .calc-result span { font-weight: bold; } .calc-result p strong { color: #333; }

Understanding Options Trading with Our Profit/Loss Calculator

Options contracts are powerful financial derivatives that give traders the right, but not the obligation, to buy or sell an underlying asset (like a stock) at a predetermined price (the strike price) on or before a specific date (the expiration date). They offer flexibility and leverage, but also come with significant risks. Our Options Profit/Loss Calculator helps you quickly estimate potential outcomes for basic options strategies.

What are Call and Put Options?

  • Call Option: A call option gives the holder the right to buy the underlying asset at the strike price. Traders typically buy calls when they expect the underlying asset's price to rise. Conversely, they sell (write) calls when they expect the price to fall or remain stable.
  • Put Option: A put option gives the holder the right to sell the underlying asset at the strike price. Traders typically buy puts when they expect the underlying asset's price to fall. They sell (write) puts when they expect the price to rise or remain stable.

Key Terms Explained:

  • Strike Price: This is the fixed price at which the option holder can buy (for a call) or sell (for a put) the underlying asset.
  • Premium per Share: This is the price you pay to buy an option or receive to sell an option, quoted on a per-share basis. Since one options contract typically represents 100 shares, the total premium for one contract would be the premium per share multiplied by 100.
  • Underlying Price at Expiration: This is the actual market price of the underlying asset when the option contract expires. This is a crucial input for determining the option's intrinsic value and your ultimate profit or loss.
  • Number of Contracts: This refers to how many options contracts you are trading. Each standard equity options contract typically controls 100 shares of the underlying stock.
  • Position Type (Buy/Sell):
    • Buy (Long): When you buy an option (either a call or a put), you are "long" the option. You pay the premium.
    • Sell (Short): When you sell or "write" an option, you are "short" the option. You receive the premium, but take on the obligation if the option is exercised.

How the Calculator Works:

This calculator focuses on the profit or loss of a single options contract at its expiration, assuming you either exercise the option (if profitable) or let it expire worthless. It also calculates the break-even price, which is the underlying asset price at which your trade would result in neither a profit nor a loss.

Example Scenarios:

1. Long Call (Buying a Call Option):

  • Option Type: Call
  • Position Type: Buy
  • Strike Price: $100
  • Premium per Share: $2.50
  • Number of Contracts: 1

If the Underlying Price at Expiration is $105:

  • You have the right to buy shares at $100, which are now worth $105. Your intrinsic value is $5 per share.
  • Your cost was $2.50 per share.
  • Profit per share = $5 – $2.50 = $2.50
  • Total Profit = $2.50 * 100 shares/contract * 1 contract = $250
  • Break-even Price = Strike Price + Premium = $100 + $2.50 = $102.50

If the Underlying Price at Expiration is $95:

  • The option expires worthless as the stock is below your strike price.
  • Your loss is the premium paid.
  • Total Loss = -$2.50 * 100 shares/contract * 1 contract = -$250

2. Short Put (Selling a Put Option):

  • Option Type: Put
  • Position Type: Sell
  • Strike Price: $50
  • Premium per Share: $3.00
  • Number of Contracts: 1

If the Underlying Price at Expiration is $55:

  • The option expires worthless as the stock is above your strike price.
  • Your profit is the premium received.
  • Total Profit = $3.00 * 100 shares/contract * 1 contract = $300
  • Break-even Price = Strike Price – Premium = $50 – $3.00 = $47.00

If the Underlying Price at Expiration is $45:

  • The option is "in the money" and you might be obligated to buy shares at $50, which are now worth $45.
  • You received $3.00 per share premium.
  • Loss per share = (Strike Price – Underlying Price) – Premium Received = ($50 – $45) – $3.00 = $5 – $3.00 = $2.00
  • Total Loss = -$2.00 * 100 shares/contract * 1 contract = -$200

Use this calculator to explore different scenarios and better understand the dynamics of options trading before making any investment decisions.

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