Enter strike, premium and the underlying price at expiry to see the profit or loss of a call or put and its break-even point.
Buyers risk only the premium; the break-even is the strike plus (calls) or minus (puts) the premium paid. Before expiry, time value keeps market prices above this simple intrinsic calculation.
This models long single-leg positions at expiry — spreads, short options and early exercise are out of scope.
The premium paid is the maximum loss, but it is also the most likely outcome. Most out-of-the-money options expire worthless, so a position that risks only the premium tends to lose that premium repeatedly. Capped downside describes the size of the loss, not its probability.
Break-even at expiry is a different question from profit before it. Time value decays throughout the option’s life and accelerates in the final weeks, so a position can be right about direction, arrive there slowly, and still lose money. Volatility falling after a known event does the same thing.
Selling options inverts the whole shape: premium is received rather than paid, the maximum gain is capped at that premium, and the loss on an uncovered call is unbounded. It is the same contract read from the other side, and this calculator models only the buying side of it.
Frequently asked questions
How do I calculate the break-even of a call option?
Strike price plus the premium paid. For a put, it is the strike minus the premium. Beyond that point at expiry, the position is profitable.
What is the maximum loss when buying options?
The premium paid — nothing more. That capped downside is the appeal of long options; sellers face the mirror image, collecting the premium but bearing large potential losses.
Why is an option worth more than its intrinsic value before expiry?
Time value: while time remains, the underlying can still move in your favour. It erodes toward zero at expiry, which is why this calculator prices positions at expiry.