Options Profit Calculator
Estimated Returns
How to Use the Options Profit Calculator
Our Options Profit Calculator is designed to help traders quickly assess the potential outcomes of their options trades. Here’s how to use it:
- Select Your Strategy: Choose the type of options strategy you’re planning to execute. For example, “Long Call”.
- Enter the Stock Symbol: Input the ticker symbol for the stock you’re interested in, like “AAPL”.
- Current Price: Fill in the current trading price of the stock.
- Strike Price: Enter the price at which the option will be exercised.
- Option Price: Input the cost of the option itself.
- Contracts: Specify the number of contracts you wish to calculate.
- Calculate: Click the calculate button to see your estimated returns.
Once calculated, you’ll see a detailed breakdown of your trade, including entry cost, maximum risk, maximum return, return on risk, and breakeven points.
Frequently Asked Questions (FAQs)
Q: What does ‘Maximum risk’ mean? A: ‘Maximum risk’ refers to the total amount you could potentially lose if the trade doesn’t go in your favor. It’s the total cost of purchasing the options contracts.
Q: How is ‘Breakeven at expiry’ calculated? A: The breakeven point is calculated by adding the strike price and the option price. For a long call, the stock price needs to rise above this point for you to start making a profit.
Q: What does ‘Maximum return: infinite’ indicate? A: This means that if the stock price rises significantly, your earnings could be unlimited on the upside since there’s no cap on how high a stock price can go.
