Long Call Calculator

What is a Long Call?

A long call is the simplest way to profit from a stock going up using options. You buy a call option, which gives you the right to buy 100 shares at the strike price on or before the expiry date. You pay a premium up front for that right.

If the stock rises well above the strike, the call becomes more valuable and you can sell it for a profit. If the stock stays at or below the strike at expiry, the call expires worthless and you lose what you paid. Your loss can never be more than the premium, but your potential profit has no upper limit.

How to use this calculator

1. Enter the stock's current price. Adding the ticker symbol is optional.
2. Enter the strike price of the call you're buying, and the premium per share.
3. Set the expiry date, or type the number of days to expiry.
4. Enter how many contracts you're buying and any fees per contract.

The calculator updates as you type. You'll see:
- What the call costs you, which is also your maximum loss, and your break-even price.
- Your chance of making a profit and of losing the full cost.
- Your profit or loss if the stock rises 10% or 20% by expiry.
- A chart of your profit or loss at different stock prices, today, at two dates in between, and at expiry. Hover over the chart (or tap it on a phone) to read exact values.
- A table of profit or loss by stock price and date, shown in dollars or as a percentage of your cost.

You can find the premium in your broker's option chain. Use the mid-price between the bid and the ask for a realistic figure. Under "Manual settings" you can enter the implied volatility yourself, change the interest rate, or set the price range shown in the chart and table.

When is a Long Call a good choice?

- You expect the stock to rise, and to rise enough and soon enough to get past your break-even before expiry.
- You want to limit your risk to a known amount, rather than buying the shares outright.
- You want leverage: a smaller outlay than buying 100 shares, with a bigger percentage gain if you're right.
- Implied volatility is low. Options are cheaper, so you pay less for the same strike.

When might it not suit?

- You expect only a small rise. Time decay can eat away the call's value before the move happens. A bull call spread may suit you better.
- Implied volatility is high, for example just before earnings. Options are expensive and can lose value quickly once the news is out, even if the stock rises.
- You need time for your idea to work but are buying a short-dated option. Many traders give themselves at least 45 to 90 days.

Things to keep in mind

- At expiry, you need the stock above the strike plus the premium you paid just to break even.
- Calls lose value every day as expiry gets closer (time decay), and this speeds up in the last few weeks.
- You don't have to hold to expiry. Many traders sell the call early to lock in a profit or cut a loss.
- Out-of-the-money calls are cheaper but less likely to pay off. In-the-money calls cost more but move more closely with the stock.

This calculator gives estimates for educational purposes only. It isn't financial advice. Option prices before expiry are modelled, and real prices will differ.