Options decay with time — so plan the exit before you enter. Enter your premium and contracts; the calculator shows the close-out premium, contracts to close for full cost recovery, and free contracts left riding.
Not a broker · Not advice · Math runs on your server
Inputs
01
Plan
02
Close premium
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Contracts to close
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Free contracts
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Closed —Free —
Total premium paid—
Exact contracts to close—
Actual proceeds—
Surplus over cost—
How the options profit calculator works
Enter the premium you paid (per share) and your contract count. Each contract controls 100 shares, so the calculator multiplies everything by 100 — a $2.50 premium on 10 contracts is $2,500 at risk.
Set a target gain. Options move fast, so targets here are usually larger than for stocks; 50% is the default.
Read the plan. You get the close-out premium, the number of contracts to close to recover your full cost, and the free contracts remaining.
Why options need an exit plan even more than stocks
A stock can sit flat while you wait. An option decays — every day that passes shaves value off, even if the underlying doesn't move. That makes "I'll decide when it gets there" especially expensive: hesitation lets theta eat a winner. The cost-recovery approach fixes the decision in advance: when the premium hits your close-out level, you close enough contracts to pull your entire premium back out, and the rest ride free. The worst case from that point is a round trip to zero on money you already recovered.
A worked example
Buy 10 contracts at $2.50 premium ($2,500 total), target +50%. Close-out premium: $3.75. Exact contracts to close: 6.67 → 7 contracts (rounded up to whole contracts). Proceeds: $2,625. Surplus: $125. Free contracts remaining: 3 — a risk-free runner on a position whose cost is fully recovered.
Educational illustration only — not investment advice. Excludes commissions, fees, bid/ask spread, and assumes fills at exactly the target premium.
Frequently asked questions
How do you calculate profit on an options trade?
Profit is (sell premium − buy premium) × 100 × contracts closed, because each contract controls 100 shares. The calculator above plans the exit: given a target gain it shows the close-out premium and how many contracts to close to recover your full premium paid.
Why is the premium multiplied by 100?
One standard US equity options contract controls 100 shares, so a quoted premium of $2.50 costs $250 per contract. The calculator applies the ×100 multiplier to every premium figure automatically.
How many contracts should I close to recover my cost?
Divide your total premium paid by the close-out premium per contract (×100), then round up to a whole contract. The calculator shows the exact and rounded figures, plus the contracts left over as a risk-free runner.
Do options positions need an exit plan more than stocks?
Arguably yes: options decay with time, so a winner can melt while you wait. Deciding your close-out premium before you enter — and closing enough contracts to recover cost when it hits — keeps time decay from turning gains into losses.
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