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Payoff for Call Buyer Calculator

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✖Price of Underlying at Expiration refers to the value of the underlying asset of a financial derivative, such as a stock, commodity, or currency, at the time the derivative contract expires.ⓘ Price of Underlying at Expiration [S_T]			+10% -10%
✖The Exercise Price, also known as the strike price, is the predetermined price at which the owner of a financial derivative, such as an option or a warrant, can buy or sell the underlying asset.ⓘ Exercise Price [X]			+10% -10%

✖The Payoff for Call Buyer, also known as the long call position, refers to the profit or loss realized by the buyer of a call option at expiration, based on the price of the underlying asset.ⓘ Payoff for Call Buyer [PCB]

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Payoff for Call Buyer Solution

STEP 0: Pre-Calculation Summary

Formula Used

Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)
PCB = max(0,S_T-X)
This formula uses 1 Functions, 3 Variables

Functions Used

max - Maximum of a function is the highest value that the function can output for any possible input., max(a1, …, an)

Variables Used

Payoff for Call Buyer - The Payoff for Call Buyer, also known as the long call position, refers to the profit or loss realized by the buyer of a call option at expiration, based on the price of the underlying asset.
Price of Underlying at Expiration - Price of Underlying at Expiration refers to the value of the underlying asset of a financial derivative, such as a stock, commodity, or currency, at the time the derivative contract expires.
Exercise Price - The Exercise Price, also known as the strike price, is the predetermined price at which the owner of a financial derivative, such as an option or a warrant, can buy or sell the underlying asset.

STEP 1: Convert Input(s) to Base Unit

Price of Underlying at Expiration: 29 --> No Conversion Required
Exercise Price: 26 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

PCB = max(0,S_T-X) --> max(0,29-26)

Evaluating ... ...

PCB = 3

STEP 3: Convert Result to Output's Unit

3 --> No Conversion Required

FINAL ANSWER

3 <-- Payoff for Call Buyer

(Calculation completed in 00.004 seconds)

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Black-Scholes-Merton Option Pricing Model for Call Option

LaTeX Go Theoretical Price of Call Option = Current Stock Price*Normal Distribution*(Cumulative Distribution 1)-(Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock))*Normal Distribution*(Cumulative Distribution 2)

Cumulative Distribution One

LaTeX Go Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock))

Black-Scholes-Merton Option Pricing Model for Put Option

LaTeX Go Theoretical Price of Put Option = Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock)*(-Cumulative Distribution 2)-Current Stock Price*(-Cumulative Distribution 1)

Cumulative Distribution Two

LaTeX Go Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock)

Payoff for Call Buyer Formula

LaTeX Go

Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)
PCB = max(0,S_T-X)

What is Payoff for Call Buyer?

The payoff for a call buyer, also known as the long call position, refers to the profit or loss that the buyer of a call option realizes at expiration based on the price of the underlying asset. The payoff depends on the relationship between the market price of the underlying asset at expiration and the exercise price of the call option.

How to Calculate Payoff for Call Buyer?

Payoff for Call Buyer calculator uses Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price) to calculate the Payoff for Call Buyer, The Payoff for Call Buyer formula is defined as the long call position, refers to the profit or loss that the buyer of a call option realizes at expiration based on the price of the underlying asset. Payoff for Call Buyer is denoted by PCB symbol.

How to calculate Payoff for Call Buyer using this online calculator? To use this online calculator for Payoff for Call Buyer, enter Price of Underlying at Expiration (S_T) & Exercise Price (X) and hit the calculate button. Here is how the Payoff for Call Buyer calculation can be explained with given input values -> 3 = max(0,29-26).

FAQ

What is Payoff for Call Buyer?

The Payoff for Call Buyer formula is defined as the long call position, refers to the profit or loss that the buyer of a call option realizes at expiration based on the price of the underlying asset and is represented as PCB = max(0,S_T-X) or Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price). Price of Underlying at Expiration refers to the value of the underlying asset of a financial derivative, such as a stock, commodity, or currency, at the time the derivative contract expires & The Exercise Price, also known as the strike price, is the predetermined price at which the owner of a financial derivative, such as an option or a warrant, can buy or sell the underlying asset.

How to calculate Payoff for Call Buyer?

The Payoff for Call Buyer formula is defined as the long call position, refers to the profit or loss that the buyer of a call option realizes at expiration based on the price of the underlying asset is calculated using Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price). To calculate Payoff for Call Buyer, you need Price of Underlying at Expiration (S_T) & Exercise Price (X). With our tool, you need to enter the respective value for Price of Underlying at Expiration & Exercise Price and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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