Call Put Option
Calculate call and put option payoffs and profits at expiration. Compare option strategies with breakeven prices, total cost, and potential returns for equity derivatives trading.
About This Calculator
The Call Put Option Calculator helps traders and investors evaluate potential profits and losses from buying call or put option contracts. Whether you are bullish expecting prices to rise or bearish expecting a decline, this tool computes your total premium cost, profit or loss at a target price, percentage return on investment, and the breakeven price where the trade becomes profitable.
The calculator uses standard option payoff formulas: for a call option, profit per contract equals the difference between the target price and strike price, minus the premium paid, multiplied by 100 shares per contract. For a put option, profit equals the difference between strike price and target price, minus the premium, multiplied by 100. The breakeven price for a call is strike plus premium; for a put, it is strike minus premium. The payoff chart visualizes profit and loss across a range of underlying asset prices so you can see exactly where the trade becomes profitable or loses money.
Regional Notes
India: Options on equities and indices are traded on NSE and BSE under SEBI regulation. Each equity option contract typically covers 100 shares. The premium is quoted per share. NSE index options (Nifty, Bank Nifty) are cash-settled. Traders must have a margin account with a SEBI-registered broker.
US: Options trade on exchanges like CBOE, NYSE Arca, and NASDAQ PHLX under SEC and OCC regulation. One standard contract covers 100 shares. US markets offer weekly, monthly, and LEAPS (long-term) options. The Options Clearing Corporation (OCC) guarantees all US-listed options.
UK: Options trade on Euronext London and ICE Futures Europe under FCA regulation. Single-stock options and index options (FTSE 100) are available. Contract sizes vary and may differ from the standard 100-share US convention. Premium is typically quoted in pence per share.
Frequently Asked Questions
What is a call option?
A call option gives the buyer the right, but not the obligation, to buy an underlying asset at a predetermined strike price within a specified time period. Traders buy call options when they expect the asset price to rise above the strike price, allowing them to purchase shares at a discount and sell for a profit.
What is a put option?
A put option gives the buyer the right, but not the obligation, to sell an underlying asset at a predetermined strike price within a specified time period. Traders buy put options when they expect the asset price to fall below the strike price, allowing them to sell shares at a higher price than the market.
How do you calculate call option profit?
Call option profit is calculated as (Target Price - Strike Price - Option Premium) multiplied by the number of contracts times 100. The breakeven price is Strike Price + Option Premium. If the target price is below the strike price, the option expires worthless and you lose the total premium paid.
How do you calculate put option profit?
Put option profit is calculated as (Strike Price - Target Price - Option Premium) multiplied by the number of contracts times 100. The breakeven price is Strike Price - Option Premium. If the target price is above the strike price, the put option expires worthless.
What does 1 contract mean in options trading?
In options trading, 1 standard contract represents 100 shares of the underlying asset. When you buy 1 call option contract, you control 100 shares. The total premium cost is the option price multiplied by the number of contracts times 100.
What is the breakeven price for a call option?
For a call option, the breakeven price is the Strike Price plus the Option Premium paid. For example, if the strike price is $100 and the premium is $5, the stock must rise above $105 per share for the call option to be profitable at expiration.
Are call and put options available in India, the US, and the UK?
Yes, options trading is available in all three markets. In India, NSE offers equity and index options. In the US, CBOE and major exchanges list options on stocks, ETFs, and indices. In the UK, Euronext and LIFFE provide options trading. Each market has its own contract specifications and regulatory framework from SEBI, SEC, and FCA respectively.
What is the maximum loss on a long call or put option?
The maximum loss for a buyer of a call or put option is limited to the total premium paid for the option contracts. This is one of the key advantages of options — the risk is predefined and capped, unlike short selling where losses can be unlimited.