Options Break-Even Calculator

Find exactly where a long call or put option breaks even at expiration, and see P&L across a range of stock prices.

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Break-even price at expiration

$109

Stock must rise above this price by expiration to profit.

Detailed results
Total premium paid$350
Intrinsic value (current)$0.00
Time value (theta decay)$3.50
% move needed to break even8.5%
Maximum loss (premium paid)$350

What this result means

Break-even price at expiration: $109.

The stock needs to trade above $108.50 by expiration to profit — a 8.5% move from current price. Maximum loss is the premium paid.

P&L at Expiration by Stock Price

Profit or loss at expiration across a range of stock prices.

P&L at Expiration by Stock Price. 13 rows, first 12 shown.
Stock PriceP&L
$73.50-$350
$78.75-$350
$84.00-$350
$89.25-$350
$94.50-$350
$99.75-$350
$105-$350
$110$175
$116$700
$121$1,225
$126$1,750
$131$2,275

How this is calculated

Call break-even = strike + premium. Put break-even = strike − premium. P&L = (intrinsic_value − premium) × 100 × contracts.

A long call option gives you the right — not the obligation — to buy 100 shares at the strike price before expiration. A long put gives you the right to sell. Both are purchased by paying a premium.

Break-even at expiration. For a call, you profit when the stock trades above strike + premium (your break-even). For a put, when it trades below strike − premium. Any price in between means you lose part or all of the premium.

Intrinsic value vs time value. The premium has two components. Intrinsic value is the immediate exercise value (call: max(stock − strike, 0); put: max(strike − stock, 0)). Time value is everything else — it reflects the probability that the option moves further in-the-money before expiration. Time value decays to zero at expiration (theta decay).

Maximum loss is the premium. For long options, you can never lose more than what you paid. This defined-risk profile is why long options are often preferred to short options or outright stock positions for speculative trades.

In-the-money vs out-of-the-money. A call is in-the-money (ITM) when the stock is above the strike. Out-of-the-money (OTM) calls cost less (lower premium) but require a larger move to profit. OTM options have higher leverage but lower probability of profit.

Assumptions

  • Calculations are for long (bought) options only — short (sold) options have different risk profiles.
  • P&L is at expiration (intrinsic value only); mid-term value includes time value not shown.
  • 1 contract = 100 shares (standard US equity options).
  • American-style exercise options may be exercised early; this calculator shows European-style expiration value.
  • No commissions or bid-ask spread included in break-even calculation.

Frequently asked questions

What happens if I hold to expiration out-of-the-money?

An out-of-the-money option expires worthless at expiration and you lose the entire premium paid. For a call, 'out of the money' means the stock is below the strike; for a put, it means the stock is above the strike. Statistically, roughly 70–80% of options expire worthless, which explains why selling options (collecting the premium) can be profitable short-term — but sellers face unlimited losses on naked calls if the stock rallies sharply.

Can I sell the option before expiration?

Yes, and this is how most options traders operate — they don't hold to expiration. If the underlying moves in your favor, the option's intrinsic value and/or time value increases, allowing you to sell at a profit before expiration. You simply 'sell to close' in the options market, pocketing the difference between your purchase price and sale price. This strategy lets you realize gains without waiting for expiration.

What is theta decay?

Theta is the 'time decay' rate — the daily erosion of an option's time value as expiration approaches. All else equal, an option loses a small amount of value each day as it gets closer to expiration. Theta decay accelerates in the final weeks: an option that loses $0.05/day in month 1 might lose $0.20/day in week 1 of expiration. Theta works against option buyers (you lose money from decay alone) and in favor of option sellers (they pocket theta decay).

What does 1 contract cover?

One standard US equity option contract covers 100 shares. If you buy 1 call with a $3.50 premium, you pay $350 total (3.50 × 100 shares). You control the right to buy 100 shares at the strike price. If you buy 5 contracts, you control 500 shares and pay $1,750 total. Always remember to multiply premium per share by 100 to get the total dollar outlay.

How do dividends affect options?

Dividend payments reduce call prices (less upside to the stock) and increase put prices (more downside appeal) on the ex-dividend date. For short-term or near-expiration options, dividend impact is minimal. For long-dated calls (LEAPS), especially on high-dividend stocks, dividend yield can meaningfully reduce the call's value. Professional pricing models like Black-Scholes account for dividend yield; if you're pricing options yourself, factor in expected dividends over the holding period.

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