Finance
Work out the payoff of a call option
=MAX(B1-B2,0)How it works in Excel
- B1 is the stock price.
- B2 is the strike price.
- MAX stops the result going below zero.
- For a put, use =MAX(B2-B1,0).
- Take off the premium you paid to see your profit.
The idea in general
An option is a right, not a duty, so you just walk away when it would lose money.
What I assumed
- The stock price is in B1 and the strike price is in B2.
Check the result on your own data before relying on it.