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Vertical Spread Calculator

Calculate maximum profit, maximum loss, break-even and return on risk for bull call, bear put, bull put and bear call spreads.

A vertical spread is two options of the same type and the same expiry at two different strikes, one bought and one sold, and this vertical spread calculator prices every variant of it at expiry from those two strikes and the net premium. The second leg is what turns an open-ended position into a bounded one: it caps the loss on a spread opened for a credit and it caps the profit on a spread opened for a debit, and in both directions the size of that cap is simply the distance between the two strikes.

Formula: credit spread max loss = width x multiplier - net credit received

Your figures

The variant decides which leg is bought and whether premium is paid or received, so the premium below is always entered as a positive figure.

The leg you are long. A bull call and a bull put buy the lower strike; a bear call and a bear put buy the higher one.

The leg you are short. It must sit on the opposite side of the strike bought.

Both legs together, as quoted — per share rather than per contract. Enter it positive; a premium typed per contract is the usual cause of a rejected spread.

One contract means one whole vertical: two option contracts, one bought and one sold.

From your own contract specification. 100 on standard US equity options.

Per option contract, charged on entry and exit. A vertical has two legs, so four charges in all.

Optional. Values the spread at this price, at expiry. Leave it blank to skip that.

Results

Maximum profit

US$300.00

against US$200.00 at risk, both at expiry

Maximum lossThe whole outlay, lost if the spread finishes worthless.
US$200.00
Break-even at expiryThe net premium above the lower strike.
US$102.00
Return on riskMaximum profit divided by maximum loss. A ratio between the two extremes, not a likelihood that either is reached.
150.00%
Net debit paidAcross every spread, after commission.
US$200.00
Spread widthThe ceiling on everything: maximum profit and maximum loss sum to the width in cash, commission included.
US$5.00 per share · US$500.00 in total
Option contracts tradedTwo per spread — one bought and one sold.
2
Shares controlledContracts multiplied by the shares each contract controls. Every cash figure scales with this, not with the number of legs.
100
Spread value at that price, per shareIntrinsic value of both legs combined, bounded by zero and the width.
US$4.00
Result at the price enteredAt expiry, if the underlying finished exactly there.
+US$200.00

What this means

A bull call spread buys the lower call and sells the higher one, and here that is 1 spread between the US$100.00 and US$105.00 strikes over 100 shares. The strikes are US$5.00 apart, so the spread can only ever be worth between nothing and US$500.00 — and the debit decides where inside that travel the position sits at zero. The US$200.00 paid is the whole of what is at risk, leaving US$300.00 above it. Break-even is US$102.00. Maximum profit and maximum loss add up to the width in cash exactly, commission included, which is the one check worth running on any spread figure: if they do not sum to the width, one of them is wrong.

  • Every figure here is an at-expiry figure, where each leg is worth its intrinsic value and nothing else. Before expiry the legs still carry time value, so the position can quite legitimately trade outside the maximum profit and maximum loss shown, and closing early gives a different result.
  • Commission is charged as four fills: two legs, each opened and closed. A leg left to expire worthless costs nothing to close, so this overstates the cost rather than understating it.
  • American options can be assigned before expiry. A short leg assigned while the long leg is still open leaves a different position from the one priced here until it is resolved, and the risk in the meantime is not what these figures describe.
  • Assumes both legs share the same underlying and the same expiry. Two different expiries make a calendar spread, which this arithmetic does not describe.

Maximum profit: US$300.00

The link reopens this calculator with the same numbers. Nothing you enter is sent to a server.

Continue with these figures

About the Vertical Spread calculation

That bound is also what makes the arithmetic exact rather than modelled, which is unusual for anything involving options. Held to expiry there is no volatility left to assume and no time value left to decay — each leg is worth its intrinsic value and nothing else — so the maximum profit, the maximum loss and the break-even price are all fixed the moment the two fills are known.

As a general options spread calculator it covers all four verticals from one set of inputs: bull call and bear put spreads, which are paid for as debits, and the bull put spread and the bear call spread, which are received as credits. It reports maximum profit and maximum loss at expiry, the break-even price, the return on risk, the width of the spread in both price and cash terms, and — if you give it a price to evaluate at — what the position comes to if the underlying finishes exactly there.

Vertical Spread formula

spread width = higher strike − lower strike

value at expiry, per share:
  call spread = min(max(price − lower strike, 0), width)
  put spread  = min(max(upper strike − price, 0), width)

debit variants:  profit per share = value − debit
credit variants: profit per share = credit − value

shares controlled = contracts × shares per contract
commission        = rate per contract × 2 legs × contracts × 2

debit:  max profit = (width − debit) × shares − commission
        max loss   = debit × shares + commission
credit: max profit = credit × shares − commission
        max loss   = (width − credit) × shares + commission

break-even: call spread = lower strike + net premium
            put spread  = upper strike − net premium

return on risk = max profit ÷ max loss × 100
width
The gap between the two strikes, in price terms. Everything the spread can ever be worth lives inside it.
net premium
Both legs together, per share, entered as a positive figure. The variant decides whether it is paid or received.
value at expiry
The intrinsic value of the two legs combined, which cannot be less than nothing or more than the width.
shares controlled
Contracts × shares per contract. Every cash figure scales with this, not with the number of legs.
round trip
Commission counted on all four fills: two legs, each opened and closed.
return on risk
Maximum profit divided by maximum loss — a ratio between the two extremes, not a likelihood of reaching either.

The min and the max in the value line are the two legs doing their jobs. The max is the option that was traded nearest the money: below its strike a call is worth nothing, and no amount of further decline makes it worth less than nothing. The min is the far leg: once price passes it, every further point gained on one option is lost on the other, so the pair stops responding altogether. Between those two limits the spread tracks the underlying point for point, and outside them it is flat. Three straight segments, and the whole payoff is described.

From that single bounded shape comes the one identity worth remembering: maximum profit and maximum loss always sum to the width multiplied by the shares controlled. The value of the spread can only ever travel from nothing to the width, and the premium merely decides where inside that travel the position sits at zero. Pay more and you buy more of the travel as profit and less as risk; take in more credit and the same swap happens the other way. Commission does not disturb it either — what it removes from the maximum profit it adds to the maximum loss. If a spread's two extremes do not add up to its width in cash, one of the two figures is wrong.

Break-even is the same symmetry read off the price axis. A call spread's payoff starts climbing at the lower strike, so it reaches zero exactly the net premium above it; a put spread's starts climbing as price falls away from the upper strike, so it reaches zero the net premium below that. Written that way it is one line for all four variants rather than four separate rules, because the option type decides the direction and the premium decides the distance, and nothing else is involved.

The premium is entered positive and the variant signs it, which removes the most common source of a wrong answer. A reader who has to decide whether a credit is a negative debit will occasionally decide wrongly, and the resulting figures look plausible rather than obviously broken. Choosing the spread by name settles both questions at once: which leg is bought, and which way the cash moved on the day.

Two of the checks the calculator applies are worth understanding rather than working around. A debit larger than the width buys something that could never be worth what it cost at any price, and a credit at or above the width would be money taken in against no possible obligation. Neither exists in a traded market, so both are almost always the same mistake — a premium typed per contract instead of per share, which inflates it by the contract multiplier. A 5.00-wide spread quoted at 1.60 is rejected outright if 160 is entered instead.

It is also worth seeing that a bull call spread and a bull put spread struck at the same two prices describe the same shape. One is paid for and profits by rising in value; the other is received and profits by expiring worthless. Their maximum profits and maximum losses are complements inside the same width, and the choice between them is about where the cash sits and how the position is margined rather than about how much is at stake.

Vertical Spread: a worked example

A bull put spread: sell the 95 put and buy the 90 put for a net credit of 1.60 a share, three contracts of 100 shares, commission 0.65 a contract.

  1. Spread width95 − 90 = 5.00 a share
  2. Option contracts3 spreads × 2 legs = 6
  3. Shares controlled3 × 100 = 300
  4. Commission, round trip0.65 × 6 × 2 = 7.80
  5. Net credit received1.60 × 300 − 7.80 = 472.20
  6. Maximum profit472.20 — the credit is all of it
  7. Maximum loss(5.00 − 1.60) × 300 + 7.80 = 1,027.80
  8. Width in cash5.00 × 300 = 1,500.00 = 472.20 + 1,027.80
  9. Break-even95 − 1.60 = 93.40
  10. Return on risk472.20 ÷ 1,027.80 = 45.94%
  11. Spread value at 93.00min(max(95 − 93, 0), 5) = 2.00
  12. Result at 93.00(1.60 − 2.00) × 300 − 7.80 = −127.80

472.20 is the most the spread can return and 1,027.80 the most it can cost, and the two sum to the 1,500.00 width exactly. Anything at or above 95 at expiry keeps the whole credit; 93.40 is level before costs; and a finish at 93.00 — four tenths of a point past break-even — turns the position into a loss of 127.80.

How to use the Vertical Spread calculator

  1. Pick the spread by name in the Spread selector. That one choice makes the page a credit spread calculator or a debit spread calculator: it sets the option type, decides which leg is bought, and tells the calculator whether the premium below was paid or received.
  2. Enter the strike you bought under Strike bought and the strike you sold under Strike sold. A bull call and a bull put buy the lower strike; a bear call and a bear put buy the higher one. If they go in the wrong way round, the message names the spread you have actually described.
  3. Enter the net premium per share for both legs together, as the chain quotes it, and always as a positive number. A 1.60 credit is entered as 1.60, not as −1.60 and not as 160.
  4. Set the number of contracts to the number of whole spreads, not the number of option contracts. One contract here means one vertical: one option bought and one sold.
  5. Take the shares per contract from your own contract specification. It defaults to 100 because that is the standard US equity convention, but index, futures and adjusted contracts control something else.
  6. Enter your own broker's commission per contract. It is applied to all four fills — two legs, each opened and closed — so if you intend to let the spread expire rather than closing it, halve the rate you enter.
  7. Add an underlying price at expiry if you want the position valued at a particular finish. Leaving it blank simply removes those rows; nothing is fetched and nothing is assumed about where the underlying is now.
  8. Check the width row last. Maximum profit and maximum loss should add up to the width in cash, and if they do not, one of the inputs is not describing the spread you meant.

Limitations of the Vertical Spread calculator

Every calculation makes assumptions. These are the ones that matter here.

  • Every figure is an at-expiry figure. Before expiry both legs still carry time value, so the spread can trade outside the maximum profit and maximum loss shown here, and closing it early gives a different result from any number on this page.
  • The break-even is a point on the payoff and is calculated before commission, so at exactly that price the position is down by the commission rather than level. The break-even that includes costs sits a little further into the money.
  • American-style options can be assigned before expiry. A short leg assigned while the long leg is still open leaves a stock position and a lone option, which is not the structure priced here, and the risk between assignment and resolution is not described by these figures.
  • Pin risk at expiry is excluded. If the underlying finishes between the strikes, the short leg's assignment and the long leg's exercise decision are settled separately and after the close, which can leave an unhedged position over the weekend.
  • Margin and buying power are excluded. Brokers set the requirement on a credit spread individually, can raise it while the position is open, and it is not the same figure as the maximum loss shown here.
  • Assumes both legs share one underlying and one expiry. Two different expiries make a calendar or diagonal spread, whose value depends on volatility and time remaining and is not arithmetic of this kind.
  • Assumes the whole spread filled at the net premium entered. Legging in one side at a time, or paying the spread between bid and ask on each leg separately, changes the premium and therefore every figure derived from it.
  • Dividends, borrowing costs and tax are all excluded. An approaching ex-dividend date in particular raises the chance of early assignment on a short call that is in the money.

Frequently asked questions about Vertical Spread

Why do maximum profit and maximum loss always add up to the spread width?

Because the spread's value at expiry can only travel between nothing and the width, and the premium decides where inside that travel the position breaks even. Whatever part of the width the premium does not occupy is the other side of the trade. Commission preserves it too, since it comes off one extreme and goes onto the other.

What is the difference between a debit spread and a credit spread?

A debit spread is paid for and gains value as it moves in your favour; a credit spread is received and profits by decaying to nothing. Set to the two credit variants the page works as a bull put spread calculator or a bear call spread calculator, starting from money already in hand. A bull call and a bull put at the same two strikes still have the same width and the same directional exposure — the difference is which side of the width you paid for and how the position is margined.

Should the premium be entered per share or per contract?

Per share, exactly as the option chain quotes it. The calculator multiplies by the contracts and the shares per contract itself. A premium typed per contract is inflated by the multiplier and is the single most common reason a spread is rejected as impossible — a 1.60 credit entered as 160 exceeds any sensible width.

Does the break-even price include commission?

No. It is the price at which the payoff itself crosses zero, which is the figure quoted everywhere and the one that lines up with a payoff diagram. Commission is applied to the cash results instead, so at the break-even price shown the position is down by the round-trip commission. The cash rows are where the true level point can be read.

What happens if I enter the long and short strikes the wrong way round?

The calculator does not silently produce a negative width. Two strikes swapped describe a different, real spread — a bull call becomes a bear call — so the message names that spread and asks you either to swap the strikes back or to select the variant you have actually described.

Why does the number of contracts mean spreads rather than legs?

Because that is how a spread is quoted and filled: one order, one price, one contract count. Entering two because a vertical has two legs would double the position. The result panel reports the option contracts that follow — two per spread — so the two figures can be checked against a broker's confirmation.

Is the return on risk the same as a probability of profit?

No. It is only maximum profit divided by maximum loss, a ratio between the two ends of the payoff. A credit spread showing a low return on risk is usually one whose short strike is far from the money, and the two facts are related — but nothing on this page estimates how likely either extreme is.

Last reviewed . See our methodology and editorial policy.

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