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How Options P&L Works

Long Call: Profit when stock rises above strike + premium. Max loss = premium paid.

Long Put: Profit when stock falls below strike − premium. Max loss = premium paid.

Short Call: Profit when stock stays below strike. Max profit = premium received. Unlimited risk above breakeven.

Short Put: Profit when stock stays above strike. Max profit = premium received. Risk = strike − premium.

Note: This calculator shows intrinsic value (expiry P&L). Actual mid-trade value also includes time value (theta).

Frequently Asked Questions

Why is 1 contract = 100 shares?

Each standard US options contract controls 100 shares of the underlying stock. So a $5.50 premium actually costs $550 per contract ($5.50 × 100).

What does break-even mean for options?

The stock price at expiration where your trade neither gains nor loses money. For a long call: Break-even = Strike + Premium. For a long put: Break-even = Strike − Premium.

Does this account for time decay (theta)?

No — this shows the intrinsic value P&L at expiration. Before expiry, your actual P&L will differ due to theta (time decay), vega (implied volatility), and delta (directional) effects.