How to Calculate Profits From Options
- 1). Determine the stock option's right. For example, assume you have a stock option that gives you the option to buy stock in a company for $20 a share if you purchase by September 1.
- 2). Determine the stock price. In the example, assume the stock price is $25. Note that if the stock price is below the option price, you will not use the option to purchase the stock because it is cheaper on the fair market.
- 3). Subtract the stock option price from the stock price. In the example, $25 minus $20 equals $5. This is the gain per stock purchased.
- 4). Multiply the number of stocks you purchased by the gain per stock purchased. In the example, assume you buy 100 shares. Then, $5 times 100 shares equals a $500 profit.
- 5). Subtract any cost to purchase the options from the profit to find the net profit.
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