Options Profit Calculator
Accurate pricing for American-style options using the Binomial Model
Calculate potential profits with dividends, early exercise valuation, and multi-leg strategies.
Input Parameters
Enter stock symbol to load current market data
$172.35
Price at which the option can be exercised
Your projected stock price at expiration
Number of days until the option expires
Annual volatility percentage — measures stock price fluctuations
Annual volatility in %
Current interest rate for risk-free investments (like US Treasury bonds)
Annual rate in %
Call: Right to buy, Put: Right to sell
Each contract represents 100 shares
More steps increase accuracy but require more computation
Dividend Information
Amount of dividend per share
Days until ex-dividend date
Strategy Legs optional
The inputs above define leg 1 (long). Add more legs to model spreads, straddles, condors, and other multi-leg positions. The Binomial tree above shows leg 1 only.
About the Binomial Model
The Binomial Options Pricing Model values American options by creating a lattice of possible future stock prices, accounting for:
- Discrete time steps until expiration
- Optimal early exercise decisions
- Dividend payments during the option's life
- Volatility and risk-free rate factors
Option Analysis Results
Net Premium
Total Cost
$652.00
For 1 contract (debit)
Estimated Profit
$348.00
At target price
Break-Even
$186.52
At expiration
Profit/Loss Visualization
Profit Zone
Loss Zone
Break-Even
Profit/Loss at Different Prices
| Stock Price | Option Value | Profit/Loss | Return % |
|---|
Comparison
| Label | Legs | Net Premium | Total Cost | Break-Even(s) | P&L @ Target |
|---|
Binomial Model Visualization
Understanding the Binomial Tree
The binomial tree models possible stock price paths over discrete time steps:
- Up Movement: Stock price increases by factor u = eσ√Δt
- Down Movement: Stock price decreases by factor d = 1/u
- Risk-neutral probability: p = (erΔt − d) / (u − d)
- Option Value: Calculated at each node, considering early exercise
- Dividends: Discounted to present (escrowed) and subtracted from the initial price
Tree preview uses 3 steps and shows leg 1 only. The full calculation uses the step count selected above.
Disclaimer: Subject to changes in Implied Volatility for options with time left until expiration.
The Binomial model provides theoretical prices and may differ from actual market prices.
Options trading involves substantial risk and is not suitable for all investors. Please note all data and information is provided "as is" for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting, or other advice.