How to Calculate Long and Short Straddle Expiration Payoff

Read a matched call and put at expiry

A long straddle needs a large enough price move to recover both premiums and fees. A short straddle keeps the most premium when the underlying finishes at strike. Use the payoff ledger to see what either side earns at a given price.

Match the strike and contract terms

A straddle pairs a call and put with the same strike, expiry and underlying. Both legs are bought in a long straddle or sold in a short straddle. Use the same contract count, multiplier and quotation basis for both legs.

Compare a price move on either side of strike

With strike 50, expiration prices of 44 and 56 generate the same gross intrinsic value. The put supplies it at 44 and the call at 56. That symmetry ends at zero because the underlying cannot go lower in this model.

Calculate the long and short straddle payoff

Multiply each leg’s intrinsic value and premium by units per leg. Call intrinsic value is the positive part of expiration price minus strike. Put intrinsic value is the positive part of strike minus expiration price. A long receives intrinsic value and pays premiums. A short owes intrinsic value and receives premiums. Sum the signed cash flows and deduct total fees once.

Combined intrinsic value = |expiration price − strike| × units per leg

Reconcile a 100-unit straddle

With one 100-unit pair at strike 50, call premium 3, put premium 2 and total fees 10, a price of 44 gives the put 600 of intrinsic value. The long earns 90 and the short loses 110. The long breaks even at 44.90 and 55.10. The short breaks even at 45.10 and 54.90.

At strike the long loses 510 and the short gains 490. At zero the put has intrinsic value of 5,000, so the long gains 4,490 and the short loses 4,510.

1. Enter one contract pair, 100 units per contract and strike 50.
2. Enter call premium 3, put premium 2 and total fees 10. Confirm the shared quote basis.
3. Set the expiration price to 44. Compare the signed put payoff and total P&L after switching from long to short.

Use one quote basis

Choose long or short, then confirm the same underlying, expiry, quote basis and currency. Enter the shared strike, expiration price, each per-unit premium, matched contract count, multiplier and explicit total fees.

Check which roots are attainable

The long’s worst outcome and short’s best occur at strike. At an underlying price of zero, put intrinsic value reaches strike times units. Above strike the call branch continues indefinitely in the model, with unbounded long gain or short loss.

If the long debit per unit equals strike, the lower root is exactly zero. A larger debit leaves only the upper root. For the short, zero retained credit yields a single strike root. If fees exceed premiums the short loses money at every nonnegative price.

Use the same expiry for both legs

One matched call and put held to one expiration checkpoint with a nonnegative underlying price. There are no rates, compounding or calendar calculations. Market selection changes currency formatting only.

Keep the price floor and tail distinct

Monetary inputs support up to 1 trillion and 12 decimal places, with a strictly positive strike. Contract count and multiplier each support 1 through 1 million. A theoretical upper root may exceed the input ceiling. Repeating prices are labeled approximate.

The expiration scenario field has a numerical ceiling. The theoretical rising-price payoff remains unbounded. A rounded root can fall between tradable ticks.

Count the opening cash flows once

Check whether premiums are per unit or per contract. Enter one fee total for both legs, and distinguish a lower break-even of zero from a lower candidate below zero.

Verify both contracts in your market

Use USD in the USA and confirm the actual deliverables. For UK premiums quoted in pence, convert both to GBP if fees are in pounds. Check Montréal Exchange contract units in CAD, ASX adjusted terms in AUD and the current NSE market lot in INR.

Choose a straddle or another payoff model

Use the Options Profit and Loss Calculator for legs with different strikes at one expiry. Use Options Breakeven for a single option, or Put Option Payoff to inspect only the downside leg.

Educational scope

Educational expiration payoff only. The model excludes pre-expiry valuation, volatility forecasts, exercise, assignment, settlement, margin, financing, taxes and FX. It does not calculate the chance of reaching a break-even.

Frequently asked questions

Sources and review

Sources reviewed Nov 12, 2026. Consult current local rules before relying on time-sensitive information.

• OIC long straddle
• OIC short straddle
• ICE UK equity option specification
• Montréal Exchange equity options
• ASX options contract specifications
• NSE individual securities derivatives