Long Call Payoff Walkthrough
Calculate long call payoff and profit using underlying price, strike, premium, and contract multiplier.
A long call has a $50 strike and costs $2 per share. At expiration, the stock is $54. One standard equity option contract represents 100 shares. Long call profit = max(stock price - strike, 0) - premium, then multiply by contract size. The common shortcut is to stop at $54 - $50 = $4 and call that profit. That is only intrinsic value before subtracting the $2 premium. Step 1 Calculate intrinsic value: max($54 - $50, 0) = $4 per share. A call only has expiration value when the underlying price is above the strike. Step 2 Subtract premium: $4…
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