Pre-trade workflow
Options profit calculator checklist
A calculator output is only useful if the inputs are realistic and the risks are known before entry.
- Strategy: confirm whether the position is long premium, short premium, stock-backed, or a spread.
- Contract terms: multiplier, expiration, strike, option type, and any adjusted deliverables.
- Premium: use realistic fills, not just the mid price when spreads are wide.
- Scenario range: test adverse, base, and favorable expiration prices.
- Before expiration: consider IV, theta, dividends, assignment, and liquidity.
- Risk size: define the dollar loss that would make the trade unacceptable.
- Exit plan: write down target, loss limit, time stop, and post-event action.
Primary reading: OIC Profit and Loss Simulator · FINRA options overview · SEC Investor Bulletin on options · OIC options pricing overview