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Call option payoff calculator

By Jude Wallis

A long call's expiry profit per share is the greater of spot minus strike or zero, minus premium. At $60 spot, $55 strike and a $2 premium, intrinsic value is $5 and profit is $3.

Long call profit per share

$3.00

Intrinsic value $5.00 at expiry.

Spot
$60.00
Intrinsic value
$5.00
Profit after premium
$3.00
$

Underlying price at expiry, per share.

$

Price the call buyer may pay for the underlying.

$

Premium per share paid for the long call.

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On this page

The formula

max⁡(S−K,0)−p\max(S-K,0)-p

SS is spot at expiry, KK is strike, and pp is premium paid per share.

Intrinsic value comes first

At a $60 spot and $55 strike, exercise value is $5 per share. Subtract the $2 premium to get $3 profit. How call options work explains the contract.

The zero floor

At a $50 spot and $55 strike, spot minus strike is negative, so intrinsic value is $0. The $2 premium then makes profit negative $2.

Per share identity

The formula is per share. The call option gives the buyer a right tied to an underlying asset.

Scope of the payoff

This is an expiry payoff for a long call before fees and tax. It is an identity, not a forecast of the underlying price. This is educational material, not financial advice.

Worked examples

\$60 spot and \$55 strike

Spot at expiry is $60, strike is $55, and premium is $2 per share. What are intrinsic value and profit?

  1. Intrinsic value is max⁡(60−55,0)=5\max(60-55,0)=5, so $5.
  2. Profit is 5−2=35-2=3, so $3 per share.

At $60 spot, $55 strike and $2 premium, intrinsic value is $5 and long call profit is $3.

\$50 spot and \$55 strike

Spot at expiry is $50, strike is $55, and premium is $2 per share. What are intrinsic value and profit?

  1. Intrinsic value is max⁡(50−55,0)=0\max(50-55,0)=0, so $0.
  2. Profit is 0−2=−20-2=-2, a loss of $2 per share.

At $50 spot, $55 strike and $2 premium, intrinsic value is $0 and long call profit is negative $2.

Calling intrinsic value profit

Intrinsic value omits the premium. The $5 intrinsic value in the first case becomes $3 profit only after subtracting $2.

Common questions

Can intrinsic value be negative?

No. The maximum function floors intrinsic value at zero.

Is this buyer or seller profit?

It is the long call buyer's profit per share at expiry.

Is this financial advice?

No. It is educational material for an expiry payoff identity.

Keep reading

This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.