Options Payoff Calculator
Build any options strategy from calls, puts, and stock, then instantly visualize the profit/loss payoff diagram, breakeven points, and max profit or loss at expiration.
Position Legs
Using defaults: price $100, 30% IV, 30 days to expiration.
Expected Return = 31% × $36.00 − 69% × $4.00 = +8.36
Payoff Diagram
Values are per share × quantity. Multiply by 100 for standard contracts.
Understanding Options Payoff Diagrams
A payoff (or profit/loss) diagram shows what an options strategy is worth at expiration across a range of possible stock prices. Instead of relying on options pricing models to estimate value before expiration, the diagram assumes the position is held to expiration, when a call or put's value is purely its intrinsic value minus (or plus) the premium originally paid or received.
Breakeven is the underlying price at which total profit/loss is exactly zero. Simple positions like a single long call have one breakeven; combinations like straddles and iron condors can have two.
Preset strategies explained
- Long call: Buying a call option gives the right to buy stock at the strike price. Risk is limited to the premium paid, while profit potential is unlimited if the stock rallies.
- Bull call spread: Buying a call at a lower strike and selling a call at a higher strike lowers the net cost versus a long call alone, but caps the maximum profit at the difference between strikes minus the net premium.
- Bull put spread: Selling a put at a higher strike and buying a put at a lower strike collects a net credit upfront. Max profit is the credit received if the stock stays above the short strike; max loss is the strike width minus the credit if the stock falls below the long strike.
- Straddle: Buying a call and a put at the same strike profits from a large move in either direction. Loss is capped at the combined premium paid if the stock finishes right at the strike.
- Short strangle: Selling an out-of-the-money call and an out-of-the-money put collects a net credit and profits if the stock stays between the two strikes. Loss is unbounded above the call strike and large (though bounded at zero) below the put strike.
- Covered call: Owning the stock while selling a call against it collects premium income, which caps upside at the strike plus premium received while leaving downside risk similar to owning the stock outright.
- Iron condor: Combining a short put spread and a short call spread profits if the stock stays between the short strikes at expiration, with defined and limited risk on both sides.
How Expected Return Is Calculated
Expected Return estimates the average outcome of a trade if you ran it many times, the same way a weighted coin flip has an expected payout. A coin with a 60% chance to win $7 and a 40% chance to lose $3 has an expected return of 0.60 × 7 − 0.40 × 3 = +3.00.
An options strategy uses the exact same formula:
The difference is that the "coin" for an option isn't fair — the odds of finishing above or below breakeven depend on where the stock is trading now, how volatile it is, and how much time is left until expiration. This calculator estimates those odds using a lognormal price distribution (the same model behind the Black-Scholes formula), driven by the Current Price, Implied Volatility, and Days to Expiration you set under "Show advanced." Max Profit and Max Loss are the same figures shown in the stat cards above.
This is a theoretical estimate based on modeling assumptions, not a prediction or guarantee — real stock prices don't perfectly follow a lognormal distribution, and the model ignores dividends, interest rates, and changes in implied volatility over time.
Frequently Asked Questions (FAQ)
A payoff diagram plots the profit or loss of an options strategy at expiration across a range of underlying prices. The x-axis is the stock price at expiration and the y-axis is your profit or loss, letting you see at a glance where a strategy makes or loses money.
Breakeven is the underlying price where total profit/loss crosses zero. This calculator scans the sampled price range for sign changes between neighboring points and linearly interpolates the exact crossing price, so a strategy can have zero, one, or multiple breakevens.
If the payoff line is still sloping upward or downward at the edge of the chart's price range, the strategy has no cap on that side within a realistic range (for example, a long call's profit keeps growing as the stock price rises). Bounded strategies like spreads flatten out at the edges, showing a fixed number instead.
All values shown are per share, multiplied by the quantity you enter. Since a standard U.S. equity option contract covers 100 shares, multiply the displayed numbers by 100 to get per-contract dollar amounts.
Expected Return = (probability of profit × max profit) − (probability of loss × max loss). The probabilities come from a lognormal price distribution (the same model behind Black-Scholes), using the current price, implied volatility, and days to expiration you enter under "Show advanced." It's a theoretical estimate, not a guarantee — real prices don't perfectly follow this distribution.
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