Customers should consider their investment objectives and risks carefully before investing in options. Robinhood Financial does not guarantee favorable investment outcomes. Past performance does not guarantee future results. All investments involve risk, including the possible loss of capital. Actual results will vary.Ĭontent is provided for informational purposes only, does not constitute tax or investment advice, and is not a recommendation for any security or trading strategy. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.Īny hypothetical examples are provided for illustrative purposes only. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Please read the Characteristics and Risks of Standardized Options. Certain complex options strategies carry additional risk. Options carry a significant level of risk and are not suitable for all investors. The maximum loss on a spread position remains limited only as long as the integrity of the spread is maintained. Failure to exercise an in-the-money options contract can cause actual profits and losses to differ from calculated values. The calculations do not incorporate taxes, fees, or annualized dividend yields.
The Chart performs hypothetical calculations based on model assumptions and other inputs, which may not reflect actual market conditions and do not guarantee future results. Actual losses may exceed calculated values due to changes in implied volatility, early assignment and ex-dividend dates, among other factors. The Profit and Loss Chart (the “Chart”) assumes positions will be held until expiration. For more helpful options education, be sure to check out the options trading essentials page. Actual gains may vary prior to expiration. Keep in mind, this graph is only showing potential profit and loss at expiration. The theoretical max you can lose (max loss) is going to be $200, which is the premium paid ($2 x the contract multiplier of 100).
OPTIONS PROFIT CALCULATOR ROBINHOOD PLUS
The breakeven price for a long call is the strike price (237) plus the premium paid ($2). You also know that you need the price to hit $239 to break even at expiration. The theoretical max profit would be unlimited because there’s no upper limit on how much the stock can potentially gain. The MEOW 237 call has a premium of $2.00. Helpfully, this includes any premium paid or collected when the position was established.Įxample: Let’s revisit the above MEOW 237 call Assuming you hold the position to expiration, this is the price the underlying stock must be above or below in order to potentially make money at expiration. Keeping track of your breakeven is another important factor. This assumes all options are held until expiration and not closed, exercised, or assigned before then. This is one of the most important keys to choosing a strategy because you’ll get an idea of how much money you can potentially make or lose. Please view our Privacy Policy and our User Agreement.The chart can help you gauge the theoretical risk and reward of any given options strategy. ©1998-2023 The Options Industry Council - All Rights Reserved. Continued use constitutes acceptance of the terms and conditions stated therein. User acknowledges review of the Terms and Conditions and Privacy Policy governing this site. ©1998-2023 The Options Clearing Corporation. Franklin Street, Suite 1200, Chicago, IL 60606. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, 125 S. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Options involve risk and are not suitable for all investors. No statement in this web site is to be construed as a recommendation to purchase or sell a security, or to provide investment advice. This web site discusses exchange-traded options issued by The Options Clearing Corporation. OCC 125 South Franklin Street, Suite 1200 | Chicago, IL 60606
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