How to Calculate Long and Short Strangle Expiration Payoff

Find profit, loss and break-even at expiry

A strangle has two strikes and a flat payoff between them. The premiums and fees determine the height of that flat region and whether either side breaks even.

Match the contract basis and order the strikes

A strangle pairs a lower-strike put with a higher-strike call. Both options have the same underlying, expiry and quotation basis. Buy both for a long strangle or sell both for a short strangle.

Test a price below, between or above the strikes

At a price below put strike only the put has intrinsic value. Above call strike only the call has intrinsic value. Inside the inclusive strike interval both contribute zero.

Build the signed two-leg ledger

Put intrinsic value per unit is the positive part of put strike minus expiration price. Call intrinsic value is the positive part of expiration price minus call strike. Multiply by units per leg. A long pays both premiums and receives intrinsic value. A short receives both premiums and owes intrinsic value. Subtract total fees once.

Net P&L = signed premiums + signed put payoff + signed call payoff − total fees

Reconcile a 45–55 strangle

A 100-unit pair with put strike 45, call strike 55, put premium 2, call premium 3 and total fees 10 costs 510 long or retains 490 short. At expiration price 40, the put has 500 of intrinsic value, so either direction loses 10. The long breaks even at 39.90 and 60.10. The short breaks even at 40.10 and 59.90.

At 50 both payoffs are zero, giving −510 long and +490 short. At zero, the put contributes 4,500 before direction, giving +3,990 long and −4,010 short.

1. Set the put strike to 45, call strike to 55 and expiration price to 40.
2. Enter one matched pair, 100 units per contract, put premium 2, call premium 3 and fees 10.
3. Compare the signed call and put ledgers, then switch directions.

Enter comparable premiums and fees

Confirm both legs use the same underlying, expiry, quote basis and currency. Enter the two strikes in order, one expiration price, separate per-unit premiums, matched contract count, multiplier and total fees. Enter zero explicitly where applicable.

Read roots and the break-even interval

From put strike through call strike, both intrinsic values are zero. This gives the long’s worst result and the short’s best result. At price zero, put intrinsic value equals put strike times units. The rising-price branch has unbounded long gain or short loss.

If short fees equal the 500 premium, every price from 45 through 55 breaks even. If fees are 501 the entire payoff is negative. If a long debit equals the 4,500 maximum put payoff, zero is a lower root. A larger debit removes the lower root.

Keep the calculation at expiration

One matched pair structure at expiration, with nonnegative underlying price and one major currency. The market selector changes formatting. There are no rates or compounding.

Separate a finite scenario field from an unbounded tail

Money inputs support up to 1 trillion and 12 decimal places. Strikes must be strictly positive and ordered. Count and multiplier each support 1 through 1 million. Rounded roots are labeled approximate. The theoretical upper root can exceed the scenario input ceiling.

The result shows what the entered cash flows imply on a nonnegative price domain. It does not estimate the chance or timing of a price move.

Check leg units and fee totals

Use the same size and unit basis for both legs. Keep the put strike strictly below the call strike. A missing lower root differs from a valid break-even at exactly zero.

Use the actual multiplier in your market

Check matched US contract deliverables in USD. Convert UK pence quotes to GBP when using pound fees. Check the Montréal Exchange specification in CAD, ASX adjustments in AUD and the NSE lot file in INR.

Compare the strangle and straddle payoff shapes

A straddle meets at one strike. A strangle is flat between two strikes, so the zero-cash case gives an interval. Use the general Options Profit and Loss Calculator when quantities or directions differ.

Educational scope

Educational expiration model. It excludes volatility, pre-expiry valuation, assignment, exercise, settlement, margin, taxes, financing and FX.

Frequently asked questions

Sources and review

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

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