Example numbers, not live prices. Replace them with the strikes and premiums from your own option chain.
Outlook: A big move, either way
Payoff at expiry for Long straddle: maximum profit unlimited, maximum loss -₹18,850, breakeven at 22,710 and 23,290.
| Index at expiry | Profit / loss |
|---|---|
| 22,600 | ₹7,150 |
| 22,700 | ₹650 |
| 22,800 | -₹5,850 |
| 22,900 | -₹12,350 |
| 23,000 | -₹18,850 |
| 23,100 | -₹12,350 |
| 23,200 | -₹5,850 |
| 23,300 | ₹650 |
| 23,400 | ₹7,150 |
How to use the calculator
- Pick the index and a strategy. The legs are laid out around the spot with the strikes the exchange lists, 50 points apart for NIFTY and 100 for BANKNIFTY and SENSEX.
- Type the index level now, and the premium of every leg from your broker or an option chain. The premiums are left blank on purpose: the calculator never guesses a price.
- Check the units per lot. The exchange sets it and revises it from time to time, so change it if it differs from the one your broker shows.
- Read the result: the chart, the maximum profit and loss, the breakevens, the money paid or received up front, and a table of profit and loss at nearby index levels. Use "Copy a link" to share the exact setup.
How to read the payoff chart
The line is the position's profit or loss if the index closes at that level on expiry day. Green above the zero line is profit, red below it is loss. The line bends only at the strikes, because an option is worth nothing beyond its strike on one side and moves rupee for rupee on the other. The dots on the zero line are the breakevens, and the dashed yellow line is the spot you entered.
Where the line runs off the edge going up or down, the profit or loss keeps growing without limit. A position with more sold calls than bought calls above its highest strike has unlimited loss on the upside; one with more bought calls has unlimited profit. Index options are cash-settled at expiry, so these figures are what you would be credited or debited.
A worked example: an iron condor on NIFTY
These premiums are made up to show the arithmetic. Suppose you sell the 23100 call at 55 and buy the 23200 call at 28, and sell the 22900 put at 60 and buy the 22800 put at 30, one lot of 65 units. You receive 55 − 28 + 60 − 30 = 57 points of net premium, which is 57 × 65 = ₹3,705, and that is the most you can make, if NIFTY expires between 22900 and 23100.
Each side has 100 points between its sold and bought strikes, so the most you can lose is (100 − 57) × 65 = ₹2,795. The breakevens are the short strikes moved out by the credit: 22900 − 57 = 22843 and 23100 + 57 = 23157. Enter these legs and the chart shows exactly those numbers.
Risk and reward of each strategy
| Strategy | Outlook | Most you can lose | Most you can make |
|---|---|---|---|
| Long call | Bullish | Limited to the premium paid | Unlimited |
| Long put | Bearish | Limited to the premium paid | Large, up to the strike less the premium |
| Short call | Neutral to bearish | Unlimited | Limited to the premium received |
| Short put | Neutral to bullish | Large, up to the strike less the premium | Limited to the premium received |
| Bull call spread | Moderately bullish | Limited to the net premium paid | Limited: the gap between strikes less the net premium |
| Bear put spread | Moderately bearish | Limited to the net premium paid | Limited: the gap between strikes less the net premium |
| Long straddle | A big move, either way | Limited to the total premium paid | Unlimited on the upside |
| Short straddle | Little movement | Unlimited | Limited to the total premium received |
| Long strangle | A big move, either way | Limited to the total premium paid | Unlimited on the upside |
| Short strangle | Range-bound | Unlimited | Limited to the total premium received |
| Iron condor | Range-bound | Limited: the wing width less the net credit | Limited to the net credit received |
Read the guides for the three combinations that build on each other: long straddle, short strangle and iron condor. To see why the lines bend and what moves a position before expiry, read option Greeks explained, and the overview of options strategies you can practise risk-free.
What this calculator leaves out
- It shows the position at expiry only. Before expiry an option also carries time value and changes with volatility, so the real position moves differently from the line.
- Brokerage, exchange charges, taxes and the margin your broker blocks are not included.
- It does no forecasting and gives no advice about which strategy to use.
To watch a position behave before expiry, with live prices and virtual money, try options paper trading on The Trade Pilot.
Frequently asked questions
What is an option payoff diagram?+
It shows how much a position makes or loses at expiry for every possible closing level of the index. The horizontal axis is the index level at expiry and the vertical axis is profit or loss in rupees. Where the line crosses zero is the breakeven.
How do I find the breakeven of an options strategy?+
For a single bought call it is the strike plus the premium paid; for a single bought put it is the strike minus the premium. For a combination, find where the total profit or loss at expiry crosses zero. The calculator does this for you and marks every breakeven on the chart.
Why does a short strangle or short straddle have unlimited risk?+
A sold call loses a rupee for every rupee the index rises above its strike, with no ceiling, so any strategy with more sold calls than bought calls above its highest strike has a loss that keeps growing. Adding a bought call further out, as an iron condor does, caps it.
Does the calculator use live prices?+
No. You type in the premiums yourself, from your broker or an option chain, and it only does the arithmetic on those numbers. It never fetches, estimates or models a market price, and the numbers shown when the page first opens are an example.
Does it include brokerage, taxes and other charges?+
No. It shows the profit or loss from the options themselves at expiry. Brokerage, exchange charges, taxes and the margin your broker blocks are not included.
What does the payoff look like before expiry?+
This calculator shows the position at expiry only. Before expiry an option still carries time value, so a real position moves differently from the line, which is why practising on live data is useful.
Educational tool only. It does arithmetic on the numbers you enter and is not investment advice. Options involve risk. See our disclaimer.