Vertical spreads cap both profit and loss, making them cheaper and less risky than buying or selling single options. Debit spreads profit from a move in your direction; credit spreads profit if the price stays on the right side of the short strike.
How to use the Options Spread Calculator
- Spread type
- Lower strike price
- Premium of the lower-strike option
- Higher strike price
- Premium of the higher-strike option
- Number of contracts
- Target price at expiration
Results update as you type, and every field accepts the units shown in its menu.
How it works
Choose the spread, enter the lower and higher strike prices with their option premiums, the number of contracts and the target price at expiry.
Tips
- Use annualised volatility and interest rates as decimals per year.
- Remember that one standard option contract usually covers 100 shares.
- Options lose time value as expiry approaches – re-run the numbers as dates change.
- Derivatives can lose more than you expect; understand the maximum loss before trading.
Common mistakes to avoid
- Mixing days and years for time to expiry.
- Ignoring commissions and the bid–ask spread.
- Forgetting dividends when pricing options on dividend-paying stocks.
Inputs explained
| Field | What to enter |
|---|---|
| Spread type | Choose one: Bull call spread (debit), Bear call spread (credit), Bull put spread (credit), Bear put spread (debit) |
| Lower strike price | Amount in your currency |
| Premium of the lower-strike option | Amount in your currency |
| Higher strike price | Amount in your currency |
| Premium of the higher-strike option | Amount in your currency |
| Number of contracts | A number |
| Target price at expiration | Amount in your currency |
Example values
How the main result changes when Lower strike price changes and everything else stays at the example values above:
| Lower strike price | Profit or loss at the target price |
|---|---|
| 50 | 5,350 |
| 75 | 2,850 |
| 100 | 350 |
| 125 | -350 |
| 150 | -350 |
| 200 | -350 |
Formula
Bull call: buy lower-strike call, sell higher-strike call (debit)Bear call: sell lower call, buy higher call (credit)Bull put: sell higher put, buy lower put (credit)Bear put: buy higher put, sell lower put (debit)P/L per contract = per-share P/L × 100Worked example
Inputs — Spread type: Bull call spread (debit); Lower strike price: $100; Premium of the lower-strike option: $6; Higher strike price: $110; Premium of the higher-strike option: $2.5; Number of contracts: 1; Target price at expiration: $107.
Results — Net premium per share (+ credit / − debit) = $-3.50; Maximum profit = $650.00; Maximum loss = $350.00; Break-even price = $103.50; Profit or loss at the target price = $350.00.
Frequently asked questions
What is a vertical spread?
Buying and selling options of the same type and expiry with different strikes.
Debit or credit spread – which is better?
Debit spreads need a move; credit spreads profit from time decay if the price holds.
What is the maximum loss on a spread?
It's capped – the debit paid, or the strike width minus the credit received.
What formula does the Options Spread Calculator use?
Bull call: buy lower-strike call, sell higher-strike call (debit).