Options Profit/Loss Calculator
Calculate P&L, break-even, and payoff table for call and put options — long or short.
How Options Work
An option gives the buyer the right, but not the obligation, to buy (call) or sell (put) 100 shares of stock at the strike price before expiration. The buyer pays a premium for this right; the seller (writer) collects the premium and takes on the obligation.
Intrinsic value is the in-the-money amount of an option: for a call, it is max(0, stock price - strike). For a put: max(0, strike - stock price). Time value is the remaining premium above intrinsic value — it decays to zero at expiration (theta decay).
In the money (ITM): A call is ITM when stock price is above strike. A put is ITM when stock price is below strike. Out of the money (OTM): The opposite — the option has no intrinsic value and expires worthless if it stays OTM.
Why Most Options Expire Worthless
Studies consistently show that roughly 70% or more of options held to expiration expire worthless. This benefits sellers (writers) statistically, but sellers face unlimited risk on short calls and substantial risk on short puts. Options buyers have asymmetric risk: maximum loss is the premium paid, maximum gain is theoretically unlimited for calls.
Theta Decay
Theta measures how much an option loses in value each passing day, all else equal. This decay accelerates as expiration approaches — in the last 30 days, an OTM option can lose most of its remaining time value. Buyers fight theta; sellers benefit from it.