Risk-Reward Calculator: Quantify Every Trade Before Entry
The risk-reward calculator returns max profit, max loss, breakeven points, and probability of profit for any options strategy. Enter strikes, expirations, and current underlying price; the calculator handles the rest.
Why the math matters: most retail traders enter positions without computing the actual risk-reward. They know the strategy 'is bullish' or 'collects credit' but never quantify the dollars-at-risk vs dollars-of-potential-gain. The calculator forces that quantification — and the act of seeing the numbers changes which trades you actually take.
Output includes: max profit, max loss, breakeven prices, probability of profit (computed from delta), and a P&L diagram across the underlying's range. For multi-leg structures, the calculator aggregates all legs into a single position-level view. Use it as the final step before order entry — if the numbers don't pass the 1–2% rule, the trade doesn't get placed.
Frequently Asked Questions
Does the calculator include commissions and fees?
Yes — round-trip commissions ($0.65/contract default) are subtracted from expected value.
How accurate is the probability of profit?
Based on delta-as-probability approximation. Accurate to within 5% for standard strikes; less accurate at extreme tails.