Options Strategy Payoff Generator

This options strategy payoff generator calculates expiry profit or loss from option types, strikes, premiums and a shared quantity. It shows numeric result cards for a pair of options, without a payoff chart. Choosing None for the second option still adds an unwanted call. Its limited price scan can also misstate maximum outcomes and profit zones. The worked spread example explains the arithmetic; these limits need independent checks.

Build a matched pair of option legs

A leg is an individual option position within a strategy. This form offers Leg 1 Type and Leg 2 Type, with Buy Call, Sell Call, Buy Put and Sell Put choices. Each active leg needs its Strike and Premium. The Current Underlying Price field is a price scenario; Lot Size supplies the same underlying units to both legs.

For a vertical spread, the options must concern the same underlying and expiry with equal quantity. The form does not ask for symbol or expiry, so verify that match yourself. It has no separate quantity for either leg, no stock holding and no way to add more option legs.

There is no separate Number of Lots field. Check quantity carefully and use the contract's current units, rather than leaving a preset unchanged. The lot-size reference explains the quantity lookup.

Which two-leg strategies you can model here

Any strategy made of exactly two options on the same underlying and expiry fits the form, provided both legs use the same quantity. Pick Buy Call, Sell Call, Buy Put or Sell Put for each leg and enter the strike and per-unit premium. The common two-leg structures map to the choices like this.

A vertical spread has one type of option at two strikes. A straddle or strangle mixes a call and a put. Confirm that the legs you entered really are the structure you intend, because the form only reports a Strategy card from what you type. Iron condors, butterflies and covered calls need more than two legs or a share holding, so they are outside this form.

OneTradeJournal does not pick strategies or suggest which one to use. These are arithmetic descriptions of how each pair pays at expiry. For the vocabulary behind each one, see option strategies for beginners.

Expiry payoff uses intrinsic value

Intrinsic value is the amount an option would be worth from exercising it at that price. At expiry, a call contributes the amount the underlying is above its strike, with a floor at zero. A put contributes the amount the strike is above the underlying, again with a floor at zero. Buying subtracts the premium paid; selling adds premium but reverses the intrinsic-value obligation.

Add the legs' per-unit results, then multiply by the common quantity. This is expiry profit or loss before charges. The calculation has no remaining-time or volatility input, so it cannot value an early exit using current option premiums. See option premium and time value.

A bull call spread example you can reproduce

These are fictional inputs: Current Underlying Price 22,600; Leg 1 Buy Call, strike 22,500, premium ₹150; Leg 2 Sell Call, strike 22,700, premium ₹80; Lot Size 65. Assume matching underlying and expiry. NSE's October to December Nifty contracts list 65 units in the file checked on 16 October 2026; all example prices are invented.

• Net premium paid per unit: ₹150 − ₹80 = ₹70.
• Total debit and maximum expiry loss: ₹70 × 65 = ₹4,550.
• Strike width: 22,700 − 22,500 = 200 points.
• Maximum expiry gain: (200 − 70) × 65 = ₹8,450.
• Breakeven: 22,500 + 70 = 22,570.

At an expiry scenario of 22,600, the underlying is above the bought call's strike, giving that call intrinsic value; the sold call has none. Combined profit is (22,600 − 22,500 − 70) × 65 = ₹1,950. The card labelled Current P&L shows this expiry scenario, not the amount available from selling and buying back the options today.

At or below the lower strike, the spread loses the net debit; at or above the higher strike, its gain is capped. The example's reward-to-risk ratio rounds to 1:1.9. These are matched-leg expiry outcomes before fees, settlement costs and any separate exercise obligations.

How to read a payoff diagram without a chart

This page has no payoff graph, so the numeric cards stand in for one. A payoff diagram plots the underlying price at expiry on the horizontal axis and the profit or loss of the whole position on the vertical axis. The line crosses zero at each breakeven, flattens where profit or loss is capped, and slopes where the position is still exposed.

• Breakeven: the underlying level where expiry profit or loss is zero. The Breakeven card gives it.
• Maximum profit and maximum loss: the flat parts of the line for a capped position. These are the Max Profit and Max Loss cards, with the scan-window caveat explained below.
• Profit zone: the range of underlying prices where the line sits above zero. For a bought straddle or strangle this is the area outside the two breakevens, so read the Profit Zone card with care.
• Slope: a bought call or a sold put gains as the underlying rises. A bought put or a sold call gains as it falls.

You can rebuild any diagram by hand. Pick a few underlying prices, run each through the Current Underlying Price field and write down the Current P&L card. Plot those points on graph paper and join them. Because the form uses expiry intrinsic value only, the points will fall on straight lines that bend at the strikes.

Credit spread example: a bull put spread on Nifty

A credit spread receives premium upfront. These are fictional inputs: Current Underlying Price 22,600; Leg 1 Sell Put, strike 22,500, premium ₹120; Leg 2 Buy Put, strike 22,300, premium ₹60; Lot Size 65. The lot size matches the Nifty contract in the current lot table. All prices are invented.

• Net credit per unit: ₹120 − ₹60 = ₹60.
• Total credit and maximum expiry gain: ₹60 × 65 = ₹3,900.
• Strike width: 22,500 − 22,300 = 200 points.
• Maximum expiry loss per unit: 200 − 60 = ₹140.
• Maximum expiry loss for the lot: ₹140 × 65 = ₹9,100.
• Breakeven: 22,500 − 60 = 22,440.

At or above 22,500, both puts expire worthless and the credit is kept. At or below 22,300, the spread has lost its full width less the credit. The reward-to-risk ratio is ₹3,900 ÷ ₹9,100, about 0.43, so the position risks more than it can earn. A sold put also carries obligations at expiry that this arithmetic does not cover, so check margin and settlement rules with your broker.

Why the maximum and profit-zone cards need checking

The tool searches a finite set of underlying prices around the entered values. Its Max Profit and Max Loss can therefore be the best and worst numbers found in that window, rather than true limits across all prices.

A long call has no finite theoretical upside limit, and an uncovered short call has no finite theoretical loss limit. A finite number on the corresponding card does not change that exposure. The risk and reward ratio is also unreliable if its inputs are merely scan-window extremes.

For a fictional long straddle, a bought call and put at the same strike and expiry, use strike 22,500 and ₹150 premium each. The combined premium is ₹300, giving expiry breakevens of 22,200 and 22,800. Profit lies outside those boundaries. The current Profit Zone card instead prints the interval between them, which reverses the meaning for this position.

Scanning can also miss a narrow payoff turning point or an exact zero plateau. Independently check important strike boundaries instead of assuming rounded scan results are exact.

Straddle versus strangle payoff at expiry

Both strategies buy a call and a put. A straddle uses one strike for both; a strangle uses a higher call strike and a lower put strike, which makes it cheaper and wider. Using the fictional straddle already shown (strike 22,500, ₹150 each), the cost is ₹150 + ₹150 = ₹300 per unit, or ₹300 × 65 = ₹19,500 for the lot. Breakevens sit at 22,500 − 300 = 22,200 and 22,500 + 300 = 22,800.

Now compare a fictional strangle: Buy Call at strike 22,700 for ₹80 and Buy Put at strike 22,300 for ₹70. The cost is ₹80 + ₹70 = ₹150 per unit, or ₹150 × 65 = ₹9,750. Breakevens sit at 22,300 − 150 = 22,150 and 22,700 + 150 = 22,850.

The strangle costs half as much here, but the underlying must travel further past its strikes before it pays. Both lose the whole premium if the underlying ends at expiry between the strikes. The Profit Zone card prints the interval between the breakevens for both, which is the loss zone for a bought pair.

Unsupported structures and practical exclusions

• Iron condors need more option legs than this form provides.
• A covered call requires a stock position that the form cannot represent.
• Calendar spreads need different-expiry valuation; a shared terminal intrinsic calculation is insufficient.
• None does not currently remove the second leg, so the single-option route is misleading.
• The page offers numeric cards, not an interactive payoff graph.

No market feed, volatility model, historical replay, broker execution or margin calculation is provided by this form. Actual costs reduce gains and increase losses. A defined spread payoff also depends on maintaining both legs; exiting one leg creates a different risk profile. For different-expiry behaviour, read calendar spreads.

Expiry payoff versus value before expiry

The generator shows what the position is worth at expiry, when only intrinsic value is left. Before expiry an option also carries time value, which depends on the days remaining, implied volatility (the market's expected size of moves, built into the premium) and interest rates. As expiry nears, time value fades toward zero and the real position value approaches the expiry line.

So a payoff calculator answers a different question from the one a trader asks while holding the position. The expiry line tells you where the position ends up if you hold to the end. It does not tell you what the position is worth today, or what you would receive by closing it tomorrow. To estimate that, you would need an option pricing model and live quotes, which this form does not include. See implied volatility and the theta entry for the two main drivers.

Turning the cards into a risk-reward ratio

Reward-to-risk is Max Profit divided by Max Loss. For the bull call spread above it is ₹8,450 ÷ ₹4,550, about 1.86, which the page rounds to 1:1.9. The bull put spread gives about 0.43. A higher ratio is not automatically better, because it says nothing about how likely the profit is. A spread that earns twice what it risks but pays off rarely can still lose money over many trades.

Measure the ratio from capped positions only. For a position with a theoretically unlimited side, a ratio built from scan-window extremes is not meaningful. Record your planned stop and target when you log the trade, then compare planned and actual results in your journal.

Charges and lot size when you use the numbers

The cards are before charges. Brokerage, exchange fees, STT (securities transaction tax) and GST all reduce the result. STT on options sold is 0.15% of premium since 1 Apr 2026, and an option exercised at expiry is charged 0.15% of its intrinsic value, paid by the buyer. The rates come from NSE circular NSE/FATAX/73524. Run your spread through the STT calculator or the F&O trading cost calculator to see the cost.

Never take the lot size from memory or a stale example. NSE revises it, and the form leaves the quantity to you. Check the current figure on the lot size reference before relying on any total.

Sources

• OIC debit call spread expiry formulas; checked 16 October 2026.
• OIC long-call upside; checked 16 October 2026.
• OIC long-straddle boundaries; checked 16 October 2026.
• NSE contract multiplier; checked 16 October 2026.