In short: an option profit calculator applies one formula. For a call option held to expiry, profit = max(0, stock price − strike) × 100 − premium paid. The break-even price is the strike plus the premium per share, and the most you can lose is the premium.
The call option formula
| Item | Formula |
|---|---|
| Intrinsic value per share | max(0, stock price − strike) |
| Profit per contract | intrinsic value × 100 − premium paid |
| Break-even price | strike + premium per share |
| Maximum loss | premium paid |
For a put, intrinsic value is max(0, strike − stock price); the rest works the same way.
Worked example
You buy one call with a strike of 50 for a premium of 2.00 per share, so you pay 200 for the contract.
| Stock price at expiry | Intrinsic value | Profit |
|---|---|---|
| 48 | 0 | −200 |
| 52 | 2 × 100 = 200 | 0 (break-even) |
| 55 | 5 × 100 = 500 | +300 |
| 60 | 10 × 100 = 1,000 | +800 |
The loss is capped at 200, while the gain keeps growing as the stock rises.
Payoff calculators vs value calculators
A profit calculator shows the result at expiry. An options value calculator estimates the price before expiry using a pricing model, with inputs such as volatility, time to expiry and interest rates. Before expiry, an option is usually worth more than its intrinsic value because of the time left.
How event contracts compare
An event contract on a prediction market is closer to a binary option: it pays 1 dollar if an event happens and 0 if not. If you buy at 0.40, the profit is 0.60 when right and −0.40 when wrong. There is no open-ended upside, and the price reads directly as a probability.
| Call option | Event contract | |
|---|---|---|
| Payoff | Grows with the stock price | Fixed: 1 or 0 |
| Max loss | Premium | Price paid |
| Main inputs | Stock price, volatility, time | Probability of the event |
Our guide to prediction markets vs futures contracts covers the other derivatives family, and expected value shows how to judge whether any price is worth paying.
Before you trade options
Options carry significant risk, and many expire worthless. The Options Industry Council and Investor.gov publish free beginner material. Practise with simulated trades first, and never trade money you cannot afford to lose.
Next step
In the United States, the regulated route is the Polymarket US app. Read our guides on signing up and depositing to get started, start small and only use money you can afford to lose.