Options Profit Calculator How to Analyze Trade Profitability


Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Employee Stock Options Calculator.

Long call calculator: Purchase call options

Important Differences and Characteristics
There is, however, a key difference between futures and stock options. A $6 change in a stock option is equivalent to $6 (per share), which is uniform for all stocks. With S& P futures, a $6 change in price is worth $755 (per contract), and this is not uniform for all futures and futures options markets. While there are other issues to get familiar with - such as the fair value of S& P futures and the premium on the futures contract - these related concepts are insignificant in practice and for what you need to understand for most option strategies.

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Growth rate: Enter the expected growth rate of the underlying company stock. Please enter as a percentage (, enter 6%). If you would like to base the growth rate on the historical growth of the company, you can use the Growth Rate Calculator (opens in a new window) on this site.

If you've ever studied a second language, you know how hard it can be. But once you learn, say, Spanish as a second language - learning Italian as a third would be much easier since both have common Latin roots. To get facility with Italian as a third language, you would need only to grasp minor changes in word forms and syntax. Well, the same could be said for learning options. (To learn the basics, read our Options Basics Tutorial .)

For example, to perm 9-Folds from 6 selections, set the Number of Selections to 6, and then change the Accumulator Fold Size to 9.

Market value of exercised options at end of term: Based on your entries, this is how much you could sell your shares for if you exercised all of your options at the end of the entered number of years. Cash needed to exercise options at end of term: Based on your entries, this is how much cash you would need to exercise all of your options.

The available options will vary depending on a selection&rsquo s Status , and whether the bet is each way. For example, if a selection has lost, then Win Odds is not relevant, so that option is removed from the form.

Stock option value (spread) at end of term: Based on your entries, this will be the value of your stock options after the entered number of years. In order to realize this value, you must be fully vested, exercise the options at the end of the entered number of years, and sell the shares at the calculated ending market price.

Optional growth rate #6: Enter an alternate growth rate for comparison purposes. If a valid entry is made to this field the stock options calculator will include an additional growth column in the year-by-year chart.

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