How to calculate options breakeven and P/L
Before buying any call or put, you need to know the price the underlying stock has to reach just for the trade to break even, and the most you can lose if it does not. Both come from a couple of simple formulas.
Breakeven
Call: Strike + Premium · Put: Strike − Premium
Example: a $150 call bought for $3.50 breaks even at $153.50
P/L at Expiration
(Intrinsic Value − Premium) × 100 × Contracts
Max loss on a long option is the total premium paid — capped and known up front.
The breakeven price is the strike adjusted by the premium you paid: a call needs the stock to rise above the strike by at least the premium, while a put needs it to fall below the strike by the premium. Because options control 100 shares per contract, every dollar figure is multiplied by 100 and by the number of contracts. If the option finishes out of the money it expires worthless and your loss is the entire premium — never more — which is why long calls and puts have defined, limited risk.
Frequently Asked Questions
How do you calculate the breakeven price of an option?
For a long call, breakeven = strike price + premium paid. For a long put, breakeven = strike price − premium paid. The premium is the per-share cost of the contract, so the stock must move past the strike by at least the premium amount for the position to turn profitable at expiration. For example, a $150 call bought for $3.50 breaks even at $153.50; a $150 put bought for $3.50 breaks even at $146.50.
What is the maximum loss on a long option?
When you buy a call or a put, your maximum loss is limited to the total premium you paid — the price per share multiplied by 100 (the contract multiplier) multiplied by the number of contracts. If the option expires worthless, you lose 100% of that premium and nothing more. This defined, capped risk is one reason traders buy long options rather than shorting them.
How is options profit calculated at expiration?
At expiration, profit per share = intrinsic value − premium paid. For a call, intrinsic value = max(stock price − strike, 0). For a put, intrinsic value = max(strike − stock price, 0). Multiply the per-share result by 100 and by the number of contracts to get the dollar P/L. The calculator above does this for any stock price you enter so you can see the outcome across scenarios.
What is the contract multiplier?
Standard US equity options have a multiplier of 100, meaning one contract controls 100 shares of the underlying stock. A premium quoted at $3.50 therefore costs $350 per contract ($3.50 × 100). All profit, loss, and breakeven figures in this calculator use the 100-share multiplier.