Buying calls: the payoff

Limited loss, upside beyond the break-even.

5 min · Intermediate · Lesson 8 of 17

Step 1 of 4

The payoff at expiration

At expiration, a call is worth the stock price minus the strike, or nothing if the stock is below the strike. Subtract the premium paid to get the profit or loss.

Call option payoff at expiration

Stock price at expiration

Stock price at expiration: $110Strike price: $100Premium (cost per share): $4

Profit / loss per share: ▲ $6.00
Per contract (×100): $600.00
Break-even: $104.00
Maximum loss: $4.00 / share

For learning only; example numbers, not market prices.

Move the stock price to see the profit or loss per share.

For entertainment and education, not investment advice.