How this number is made
At expiration a long call is worth the share price minus the strike, and nothing if that is negative. A long put is worth the strike minus the share price, and nothing if that is negative. You paid a premium either way, so the profit is that value minus the premium. One contract is 100 shares. Early exercise, dividends, and a sale before expiration are not this page.
- The premium is per share, the way quotes are written, not the $200 you paid for a $2 contract.
- Contracts multiply the whole result by 100 each.
Formula
Call value per share = the greater of zero and price − strike. Put value = the greater of zero and strike − price. Profit = (value − premium) × 100 × contracts.
Worked example
With the figures already in the form, profit at expiration is $800.00.
Questions
What if I sell before expiration?
The option can still have time value. This page assumes time is gone and only the intrinsic value is left.
Where are commissions?
Not included. Subtract them from the profit if you paid them.