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Long Call (bullish) Calculator

Purchasing a call is one of the most basic options trading strategies and is suitable when sentiment is strongly bullish. It can be used as a leveraging tool as an alternative to margin trading.

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20th Jan 2023 $95 Call Select option Select
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Estimated returns

Click the calculate button above to see estimates

Commonly asked Long Call questions

+ How do you calculate call options?

To calculate the value of a call at expiration is straightforward:

Value at expiry is the amount the underlying stock price exceeds the call's strike price.

Value = stock price - strike

Profit at expiry is the value at expiry (above), less the premium paid for the option.

profit = (value at expiry - option cost) x (number of contracts x 100)
profit = ((stock price - strike) - option cost) x (number of contracts x 100)

Breakeven at expiry will always be higher than the underlying stock price at the time of purchase, and is the strike plus the option price.

Breakeven price = strike + option cost

To calculate profit prior to expiry requires more advanced modelling.

The price corresponds primarily to the probability of the stock closing above the strike price at expiry. This can be generalized to both call and put options having higher extrinsic* premium for strikes closer to the current stock price, longer time until contract expiry, and higher stock volatility.

profit = ((stock price - strike price) - option cost + remaining time value) x (100 x number of contracts)

*extrinsic premium, or the premium above the intrinsic value

You can use our calculator above, which uses the Black Scholes formula to estimate the value of a long call purchase before or at expiry.

Related: What happens when options expire to ensure you capture the maximum profit

+ How to choose the best strike price for a long call?

There is no perfect formula for this, but the most profitable strike is usually between the current stock price and the potential bullish price you expect the stock to reach at expiration.

Use our Option Finder Calculator tool to see the most profitable options, including probability of profit.

+ How much do you make on call options?

There is no cap on the maximum possible profit using a long call strategy, and profit increases linearly with the rising price of the underlying stock. Loss is generally limited to the initial value of the option paid.

+ Volatility on long calls

Whether purchasing a call or put option, a long option purchase with time left til expiry has exposure to changes in volatility of the underlying stock. If the market predicts increased volatility ahead, the option price can go up, and if the market seems to be gaining stability, the price will decrease more rapidly.

+ Time value and call options

Call options lose value over time, known as time decay. 'In the money' options have intrinsic value, but any price above this base value (or, for out-of-the-money calls) is the time value.

Time value will decrease as expiration approaches, but not at a linear rate; prices begin to decay more rapidly in the last month of a contract.

+ What happens when call options expire?

If the stock price finishes below a call option's strike price, or above a put option's strike price, the option expires worthless, and the buyer has lost the cost of purchase.

Otherwise the option can be executed, or the option sold as expiration approaches.

Read more on how to maximize profit on a call option at expiration