Inputs
- Leg 1
- Leg 2
Results
Bull Call Spread · how it works
- Breakeven
- $102.50
- Net debit
- $250.00
- Premiums × quantity × 100
- Max profit
- $750.00
- Max loss
- −$250.00
At expiration, in dollars for the whole position. To see the payoff before expiration and with live prices, build it in the options calculator.
What the breakeven is
The breakeven is the stock price at expiration where an options position neither makes nor loses money. At expiration every option is worth only its intrinsic value, so the payoff is a set of straight lines that bend at the strikes, and each breakeven is where that line crosses zero. Comparing the breakeven with where you think the stock will be tells you whether the trade's reward is worth its risk.
Common breakeven formulas
| Strategy | Breakeven at expiration |
|---|---|
| Long Call | Strike + premium |
| Long Put | Strike − premium |
| Short Call | Strike + premium |
| Short Put | Strike − premium |
| Covered Call | Stock price paid − premium |
| Bull Call Spread | Long strike + net debit |
| Bear Put Spread | Long strike − net debit |
| Bull Put Spread | Short strike − net credit |
| Bear Call Spread | Short strike + net credit |
| Long Straddle | Strike ± total premium |
| Iron Condor | Short put − net credit, short call + net credit |
Premiums and credits are per share. Each strategy links to its guide, with a payoff diagram and a live example.
Worked example
An iron condor, one contract per leg: sell the $90 put for $1.20 and buy the $85 put for $0.50, sell the $110 call for $1.10 and buy the $115 call for $0.40. The net credit is 1.20 − 0.50 + 1.10 − 0.40 = $1.40 a share.
Lower breakeven = short put − credit = 90 − 1.40 = 88.60
Upper breakeven = short call + credit = 110 + 1.40 = 111.40
Max profit = credit × 100 = $140; max loss = (5 − 1.40) × 100 = $360
| Buy 85 put | $0.50 |
|---|---|
| Sell 90 put | $1.20 |
| Sell 110 call | $1.10 |
| Buy 115 call | $0.40 |
| Breakevens | $88.60 · $111.40 |
|---|---|
| Net credit | $140.00 |
| Max profit | $140.00 |
| Max loss | −$360.00 |
Assumptions & limitations
- At expiration only: every leg is valued at its intrinsic value, so time value and volatility play no part.
- All legs expire on the same date. Calendars and diagonals need a model for the leg that's still open; build those in the options calculator.
- No commissions, fees or early assignment. Short American options can be assigned early, most often in the money or before an ex-dividend date.
- Premiums are what you enter, per share; quantities are whole contracts of 100 shares.
To see the payoff before expiration, on a real stock with live prices, open it in the options calculator.
Frequently asked questions
Why does my broker show a different breakeven?
Usually because of what's included. This calculator works at expiration, from the per-share premiums you enter, without commissions. Brokers often add fees, or show a breakeven for today that includes the options' remaining time value. Premiums here are per share; dollar figures multiply by 100 shares per contract and each leg's quantity.
Does the breakeven change before expiration?
Yes. Before expiration the options still have time value, so the stock price at which you'd break even today is different and moves from day to day. The breakeven here is the one at expiration, the textbook definition. The options calculator plots today's curve as well.
Why are there two breakevens?
Positions that profit inside a range (iron condors, short straddles) or from a big move either way (long straddles and strangles) cross zero twice: once below the strikes and once above.
What does Unlimited mean?
A short call with no long call above it loses more the higher the stock goes, with no cap, and a long call's profit has no cap either. Max profit or max loss then reads Unlimited.
How is the net debit or credit worked out?
Premiums paid minus premiums received, per share, times 100 shares per contract and each leg's quantity. A debit is what you pay to open the position; a credit is what you receive.
References
- Hull, J. C. Options, Futures, and Other Derivatives. Pearson (11th ed., 2021).
- The Options Clearing Corporation. Characteristics and Risks of Standardized Options (the options disclosure document).
Related tools
- Black-Scholes CalculatorTheoretical call and put prices from the Black-Scholes-Merton model, with dividends and Greeks.
- Option Greeks CalculatorDelta, gamma, theta, vega and rho for a position, per share and in dollars.
- Implied Volatility CalculatorSolve the volatility an option's price implies, with the expected move it prices in.
- Option FinderScan single options, spreads, iron condors and cash-secured puts for a symbol, screened for liquidity and ranked by return, probability of profit or risk/reward.
Or open the options calculator to build any strategy on a live chain, read how we price options, or browse the strategy guides.