Option Payoff Calculator
Option Payoff Calculator (Call and Put)
Profit or loss at expiry for buying or selling a call or a put: the breakeven price, the maximum profit and loss, and a chart of the payoff across underlying prices.
Profit or loss at expiry
Buy 1 lot of 500 of a $1,000 call at a premium of $25; price at expiry $1,060
Option payoff at expiry
- S
- the underlying price at expiry
- K, P
- the strike and the premium per unit
- Q
- lot size × number of lots
- ±
- + for the buyer, − for the seller. Breakeven: K + P for a call, K − P for a put
Worked example
Buy 1 lot of 500 of a $1,000 call at a premium of $25; price at expiry $1,060
Premium paid = 25 × 500 = $12,500, the most this position can lose
Value at expiry = max(1,060 − 1,000, 0) = $60 a unit
Profit = (60 − 25) × 500 = $17,500
Breakeven = 1,000 + 25 = $1,025
Profit or loss at expiry: strike 1,000, premium 25, one lot of 500
| Price at expiry | Buy call | Sell call | Buy put | Sell put |
|---|---|---|---|---|
| $900 | $−12,500 | $12,500 | $37,500 | $−37,500 |
| $950 | $−12,500 | $12,500 | $12,500 | $−12,500 |
| $1,000 | $−12,500 | $12,500 | $−12,500 | $12,500 |
| $1,025 | $0 | $0 | $−12,500 | $12,500 |
| $1,050 | $12,500 | $−12,500 | $−12,500 | $12,500 |
| $1,100 | $37,500 | $−37,500 | $−12,500 | $12,500 |
Reading an option payoff
A call gives its buyer the right to buy the underlying at the strike price; a put, the right to sell at the strike. At expiry, an option is worth only what exercising it would earn: for a call the amount by which the price is above the strike, for a put the amount by which it is below, and otherwise nothing. The buyer paid a premium for that right, so the buyer’s profit is the value at expiry minus the premium. The seller (writer) received the premium and must pay out the value, so the seller’s profit is exactly the buyer’s loss. The chart plots that line across a range of prices around the strike; the point where it crosses zero is the breakeven.
Limits. A buyer can lose no more than the premium. A call buyer’s gain has no fixed ceiling; a put buyer’s is largest if the price falls to zero. A seller’s gain is capped at the premium, while a call seller’s loss is unlimited and a put seller’s can reach the strike less the premium. That is why exchanges require sellers to post margin, and why a sold option can cost far more than it brought in.
What the page leaves out. It shows the payoff at expiry only; before expiry an option’s price also depends on time and volatility (see the Black-Scholes calculator). Brokerage, exchange charges, securities transaction tax, GST and stamp duty come on top, as do taxes on any profit. Index options in India are European style and settled in cash; NSE’s stock options have been European style, exercisable only at expiry, since January 2011, and stock derivatives held to expiry are settled by delivery of the shares.
How it tends to go. SEBI’s own studies of individual traders in equity futures and options found that 89% lost money in 2021–22 (study of January 2023), 93% over the three years 2021–22 to 2023–24 (September 2024), and nearly 91% in 2024–25 (July 2025), when their net losses came to ₹1,05,603 crore. A payoff chart shows what can happen, not how likely it is. To size a trade to a loss you can bear, use the position size calculator; to compare reward with risk, the risk-reward calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How do you calculate the profit on a call option?
(Price at expiry − strike − premium) × lot size, if the price ends above the strike; otherwise you lose the premium. A 1,000 call bought at 25 with the price at 1,060 makes (60 − 25) × 500 = $17,500.
What is the breakeven of an option?
Strike + premium for a call, strike − premium for a put. A 1,000 call bought for 25 breaks even at 1,025 at expiry, before costs.
What is the maximum loss when selling an option?
For a sold call there is no limit: the loss grows as the price rises. For a sold put it is the strike minus the premium, per unit, if the price falls to zero. Buyers can lose only the premium.
Do most option traders make money?
SEBI’s studies say no: 93% of individual equity F&O traders lost money over 2021–22 to 2023–24, and nearly 91% in 2024–25.
Related calculators
References
- Hull JC. Options, Futures, and Other Derivatives. Pearson. Payoffs of long and short calls and puts at expiry; the Black-Scholes-Merton model and the Greeks, with theta quoted per calendar day.
- Bodie Z, Kane A, Marcus AJ. Investments. McGraw-Hill. Holding-period return, cost basis, option payoffs at expiry and option pricing.
- National Stock Exchange of India: stock option contracts expiring on or after 27 January 2011 are European style, exercisable only at expiry (reported by Business Standard, 3 January 2011, “NSE to offer European-style stock options”). Index options were already European.
- Securities and Exchange Board of India (SEBI). Study: Analysis of Profit and Loss of Individual Traders dealing in Equity F&O Segment. 25 January 2023. 89% of individual equity F&O traders lost money in FY 2021–22.
- SEBI. Press release, 23 September 2024: Updated SEBI Study Reveals 93% of Individual Traders Incurred Losses in Equity F&O between FY22 and FY24; Aggregate Losses Exceed ₹1.8 Lakh Crores Over Three Years. Average loss about ₹2 lakh per trader; about ₹50,000 crore spent on transaction costs.
- SEBI. Comparative study of growth in Equity Derivatives Segment vis-à-vis Cash Market after recent measures. Released 7 July 2025. Nearly 91% of individual traders incurred a net loss in equity derivatives in FY 2024–25; their net losses were ₹1,05,603 crore, against ₹74,812 crore in FY 2023–24.