Option Profit/Loss Calculator

How to Use This Tool

1. Set your parameters - Enter the current stock price, expiration date, implied volatility, and risk-free rate in the top section
2. Build your position - Click "Add Option Leg" to add calls or puts, or "Add Stock" for a stock position. Set the strike price, premium, direction (long/short), and number of contracts for each leg
3. Use presets - Or quickly load common strategies like covered calls, spreads, or iron condors from the Preset Strategies section
4. Analyze results - View your P&L chart, max profit/loss, breakeven points, and estimated probability of profit in real-time
5. Toggle curves - Use the checkboxes to show/hide the "At Expiration" and "Today" P&L curves

What is a Payoff Diagram?

A payoff diagram (or profit/loss diagram) shows your potential profit or loss across different stock prices. The X-axis represents the underlying stock price, while the Y-axis shows your profit or loss in dollars.

Reading the Chart

• Solid blue line (At Expiration) - Shows P&L if you hold until expiration
• Dashed lines - Show P&L at earlier dates, accounting for time value
• Zero line - Where the chart crosses zero is your breakeven point
• Above zero - Profitable territory
• Below zero - Loss territory

Time Value and Black-Scholes

Before expiration, options have time value in addition to intrinsic value. This calculator uses the Black-Scholes model to estimate option prices at different dates before expiration.

Common Strategies