Interested in how much profit you might be able to generate (or lose) in your next options trade? Thestopstockbroker’s Call and put option profit calculator allows you to calculate profit and loss on your call and put options, even before you put your first rupee. Simply input the strike price, premium, and your spot price at the expiry date, and calculate your P&L and breakeven point in seconds! Free, no logins needed and works for all stocks, indices, and commodities.
Leave the math out of options and trade with this tool whether you're buying your first call or selling puts for premium income.
How to Use the Option Profit Calculator
The calculation with the calculator only takes a minute or so. This is how it works:
Step 1 – Select Call or Put
Decide which type of option to trade – a call option (bullish) or a put option (bearish). The formula and the payoff figure will vary depending on your selection.
Step 2 – Enter Strike Price, Premium & Lot Size
Enter your selected strike price, premium paid (or received if you sold) and lot size. Lot size is important — a miscalculation of just a few basis points can have a huge impact on your P&L forecast.
Step 3 – Input Expected Spot Price at Expiry
Input the price at which you believe the underlying will be at the expiry date.Type in the price you think the underlying share or index will be at when the trade is settled. This is the ‘what if’ price, which is the price that the calculator uses to predict your results.
Step 4 – Read Your Profit/Loss & Breakeven Instantly
The calculator provides your expected profit or loss, and the exact breakeven price — the point at which you're neither making nor losing any money.
How Option Profit Is Calculated (Formula Explained)
Knowing the mathematics behind the numbers allows you to have confidence in the results and detect mistakes early.
Call Option Profit Formula
The calculator applies a standard, well-established formula so the result is consistent and reliable. In simple terms, it works out profit = (sell premium − buy premium) × lot size × number of lots. The core formula is:
P/L = (Sell Premium − Buy Premium) × Lot Size × Lots
The sign is reversed for a buyer and for a seller. The calculator will calculate premium change multiplied by the total quantity. The tool does this automatically, and recalculates with every change you make to the input - you could do this on paper or a spreadsheet in minutes, and then risk making a lot of mistakes.
Why Use an Option Profit Calculator Before Trading
Avoid Emotional Trading Decisions
Numbers don't lie. The use of a trade calculator takes the guesswork and emotional bias out of the equation, resulting in better entries.
Plan Risk-Reward Before Entering a Trade
Once you understand your maximum loss and breakeven in advance you can then accurately size your position and set realistic targets.
Compare Multiple Strike Prices Quickly
The calculator allows you to quickly test a few scenarios, rather than trying to scratch out every strike you're thinking of, and determine which strike offers the best risk-reward situation.
Common Mistakes Traders Make While Calculating Option Profit
-
Neglecting lot size — If you don't multiply by lot size, you'll have very different profit estimates. With TheTopStockBroker's option profit calculator this is easily avoided as lot size is already taken into account.
-
Forgetting brokerage, STT, and taxes —Ignore brokerage, STT and taxes because these costs will be deducted in the calculator to arrive at the take home profit. TheTopStockBroker's calculator also shows gross numbers, so make sure you subtract gross charges separately from the gross number, or you will be misusing the number as your gross profit.
-
Ignoring time decay (theta) —This calculator displays P&L at expiry and prior to expiry, the option value is also impacted by theta. Also on TheTopStockBroker, the payoff displayed is an estimate based on the expiry and not the actual theta adjusted.
-
Miscalculating breakeven for option sellers — sellers profit when the price stays away from breakeven, the opposite logic of buyers, and this is a common point of confusion. When using TheTopStockBroker's tools, double-check whether you're viewing the buyer's or seller's breakeven logic before drawing conclusions.