Put option exercise calculator
Instead of using calls same as you do with call options, you use puts switch — in other words, you place the premium and the strike price on opposite sides of the options chart.
Options Exercise
This will explain how to find the maximum loss, maximum gain, and the break-even point for buyers holders of put options. To find the maximum gain, you have to exercise the option at the strike price. The premium and the strike price go on opposite sides of the options chart.
The simplest way to figure this point out for a put option is to use put down put options go in-the-money when the price of the stock goes below the strike price. When using put down, you subtract the premium from the strike price:.
For this investor, the break-even point is As with call options, the break-even point is always the same for the buyer and the seller.
The following steps show you how to calculate the maximum gain and loss for the seller of a put option. You will find out how to demonstrate calculations for the break-even point.
The seller makes money only if the holder of the option fails to exercise it. To calculate the maximum loss, you have to exercise the option at the strike price.
The premium and strike price go on opposite sides of the options chart. You calculate the break-even point for buying or selling puts the same way: You use put down the strike price minus the premium to figure out the break-even point:.
Put options go in-the-money when the price of the stock goes below the strike price put down.
Employee Stock Option Calculator
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