How to Calculate Options Profit: 8 Formulas for Calls, Puts and Spreads With Worked Examples

To calculate options profit at expiration, take what the option is worth at expiration (its intrinsic value), subtract the premium you paid (or add the premium you received if you sold it), then multiply by 100 shares per contract and by the number of contracts. A long call is worth max(0, stock price − strike) at expiration; a long put is worth max(0, strike − stock price). Everything else on this page (breakevens, max profit, spreads, covered calls) is that one rule applied to each leg and added up.

That is how to calculate options profit for any position. The formulas are simple. The mistakes come from the 100-share multiplier, from mixing up which side received the premium, and from forgetting that a multi-leg trade has more than one breakeven. Each section below gives the formula and a worked example with round, hypothetical numbers. If you would rather type numbers in than do the arithmetic, the free options profit calculator computes the same values and draws the payoff chart.

The 4 single-leg formulas

All four use the same symbols: S = stock price at expiration, K = strike, P = premium per share, n = number of contracts.

The buyer and the seller of the same option have mirror-image results. Whatever the buyer makes, the seller loses, before fees.

How to calculate profit on a call option

Example: the stock trades at $50. You buy 2 contracts of the $55 call for $1.20 each.

• Cost: $1.20 × 100 × 2 = $240. This is also your max loss.
• Breakeven: $55 + $1.20 = $56.20.

At expiration:

At $58 the trade returns $360 on $240 of premium, a 150% return on the money at risk. At $56 the call is in the money but the trade still loses, because the stock did not rise far enough to cover the premium. "In the money" and "profitable" are different things.

How to calculate profit on a put option

Example: the stock trades at $100. You buy 1 contract of the $95 put for $2.50.

• Cost and max loss: $2.50 × 100 = $250.
• Breakeven: $95 − $2.50 = $92.50.
• Max profit (stock goes to $0): ($95 − $2.50) × 100 = $9,250.

If the stock is at $88 at expiration, the put is worth $95 − $88 = $7.00, and profit is ($7.00 − $2.50) × 100 = $450.

How to calculate profit on a cash-secured put

A cash-secured put is a short put with the full assignment cost set aside. The formula is the short-put row of the table.

Example: the stock trades at $47. You sell 1 contract of the $45 put for $1.10, 30 days to expiration.

• Credit received: $1.10 × 100 = $110. This is the max profit.
• Cash set aside: $45 × 100 = $4,500.
• Breakeven: $45 − $1.10 = $43.90.
• Return on collateral if the put expires worthless: $110 / $4,500 = 2.44% for 30 days.

If the stock closes at $42, you are assigned 100 shares at $45. The put leg's result is ($1.10 − $3.00) × 100 = −$190, which is the same as buying the shares at your $43.90 breakeven and marking them at $42. The cash-secured put calculator runs this math with a yield and assignment view.

How to calculate profit on a covered call

A covered call combines 100 shares with one short call, so profit is the share result plus the call result.

Example: you own 100 shares bought at $60 and sell 1 contract of the $65 call for $1.50.

• Max profit: (($65 − $60) + $1.50) × 100 = $650, reached at any price at or above $65 because the shares are called away at $65.
• Breakeven: $60 − $1.50 = $58.50.
• At $62: shares +$200, call expires worthless and you keep $150, total +$350.
• At $70: shares are called away at $65 (+$500) plus the $150 premium, total +$650. The extra $5 of upside above $65 belongs to the call buyer.

The covered call calculator formulas page breaks this into static return, if-called return and downside protection.

How to calculate profit on a spread

A spread is two or more legs. Calculate each leg with its single-leg formula and add them. The shortcuts below give the same answer.

Debit spread (bull call spread)

Example: buy the $50 call for $3.00 and sell the $55 call for $1.20. Net debit = $1.80.

• Max loss = net debit × 100 = $180.
• Max profit = (spread width − net debit) × 100 = ($5 − $1.80) × 100 = $320.
• Breakeven = long strike + net debit = $51.80.
• At $54: the $50 call is worth $4, the $55 call expires worthless, so profit = ($4 − $1.80) × 100 = $220.

Credit spread (bull put spread)

Example: sell the $95 put for $2.10 and buy the $90 put for $0.80. Net credit = $1.30.

• Max profit = net credit × 100 = $130.
• Max loss = (spread width − net credit) × 100 = ($5 − $1.30) × 100 = $370.
• Breakeven = short strike − net credit = $93.70.
• Return on risk = $130 / $370 = 35.1% if the spread expires worthless.

Iron condor

Example: with the stock at $100, sell the $95 put for $1.40, buy the $90 put for $0.60, sell the $105 call for $1.30 and buy the $110 call for $0.50.

• Net credit = $1.40 − $0.60 + $1.30 − $0.50 = $1.60, so max profit is $160 (stock between $95 and $105 at expiration).
• Max loss = ($5 wing width − $1.60) × 100 = $340. Only one side can lose at expiration, so the loss is capped by one wing.
• Two breakevens: $95 − $1.60 = $93.40 and $105 + $1.60 = $106.60.
• At $108: the short $105 call is worth $3, so profit = ($1.60 − $3.00) × 100 = −$140.

Multi-leg trades are where hand math goes wrong most often, because each leg moves differently. If you track positions leg by leg, the guide to per-leg P&L on options shows how to keep each leg's result visible inside the structure.

How to calculate profit before expiration

The formulas above assume you hold to expiration. If you close early, use the option's current price instead of its intrinsic value:

• Long option: (current price − price paid) × 100 × n
• Short option: (premium received − current price to buy back) × 100 × n

Example: the two $55 calls bought at $1.20 now trade at $2.05. Unrealized profit = ($2.05 − $1.20) × 100 × 2 = $170, even if the stock is still below $56.20. Before expiration an option still carries time value, so the current price is usually higher than intrinsic value alone. That gap shrinks to zero at expiration.

Use the price you can actually trade at. For a long option you sell at the bid; for a short option you buy back at the ask. The mid price overstates what you can realize on wide markets.

Three adjustments the simple formula leaves out

1. Commissions and fees. Subtract your broker's per-contract commission and regulatory fees for every opening and closing trade. On small premiums they are a noticeable share of the profit.
2. Annualized return. A 2.44% return in 30 days and a 2.44% return in 90 days are not the same result. Annualized return = period return × 365 / days held, so the 30-day cash-secured put above annualizes to about 29.7% before fees. The annualized ROI on options guide covers when that number misleads.
3. Rolls. When you roll a position, the profit of the whole trade is the sum of every credit received minus every debit paid across all the rolls, not the result of the latest contract alone. True cost basis after rolls walks through how to carry those credits forward.

Quick reference

All examples on this page use hypothetical prices chosen to keep the arithmetic easy to follow. They are not quotes or trade recommendations. To check a real position, enter your own strikes and premiums in the options profit calculator.

FAQ

How do you calculate profit on a call option?

At expiration, profit on a long call = (max(0, stock price − strike) − premium paid) × 100 × number of contracts. Buying two $55 calls for $1.20 and seeing the stock at $58 at expiration gives (3.00 − 1.20) × 100 × 2 = $360. Breakeven is the strike plus the premium, $56.20 here.

How do you calculate profit when selling a put?

Profit on a short put at expiration = (premium received − max(0, strike − stock price)) × 100 × contracts. Selling a $45 put for $1.10 keeps the full $110 if the stock finishes above $45. Breakeven is the strike minus the premium, $43.90.

How do you calculate profit on an option before expiration?

Before expiration, profit = (current option price − entry price) × 100 × contracts for a long option, and the reverse for a short one. The current price still includes time value, so the result differs from the expiration formula.

How do you calculate the max profit of a credit spread?

The max profit of a credit spread is the net credit × 100. The max loss is (spread width − net credit) × 100. A $95/$90 bull put spread opened for a $1.30 credit has a max profit of $130 and a max loss of $370.