Options Spread Calculator — Vertical Spread P&L
Analyse the profit and loss profile of a vertical options spread: enter the two strike prices and premiums, choose the spread type, and get max profit, max loss, breakeven, and return-on-risk — with an interactive payoff diagram.
Spread type
Spread width minus net debit — profit at favourable expiry
- 1
Net debit paid
P1 − P2 = 5 − 2 = 3 - 2
Spread width
K2 − K1 = 110 − 100 = 10 - 3
Max profit per share
10 − 3 = 7
How does this calculator work?
A vertical spread pairs long and short options at K1 (lower) and K2 (higher). Bull call or bear put debit spread: max profit = (K2−K1) − net debit; max loss = net debit. Credit spreads (bull put, bear call): max profit = net credit; max loss = (K2−K1) − net credit. Return-on-risk = max profit / max loss.
Formula
How this is calculated
A vertical spread combines a long and a short option of the same type (both calls or both puts) and expiry on the same underlying, at different strike prices. The two legs define a bounded profit/loss profile: unlike a naked long option you never lose more than the net premium paid (debit spread) or the spread width minus the credit received (credit spread).
For a bull call spread you buy the lower call and sell the higher call. If the stock closes below K1 at expiry you lose the net debit; above K2 you capture the maximum profit (K2 − K1 − net debit); between the two strikes the P&L ramps linearly with the stock price. The breakeven is K1 + net debit. The bear put spread is the bearish put equivalent: buy the higher put, sell the lower put — max profit above K2 − K1 − net debit if stock falls below K1.
Credit spreads work in reverse: you receive a premium upfront and profit if the stock stays outside the strike range at expiry. A bull put spread (sell higher put, buy lower put) profits if the stock stays above K2; a bear call spread (sell lower call, buy higher call) profits if it stays below K1. The return-on-risk is max profit ÷ max loss — for credit spreads this is typically below 100% because the probability of profit is greater than 50%. All calculations assume European-style settlement at expiry and ignore transaction costs, dividends, and early assignment risk.
Frequently asked questions
A debit spread costs money upfront (net premium paid) and profits if the stock moves in the intended direction. A credit spread receives money upfront and profits if the stock stays out of the loss range. Both cap maximum profit and maximum loss. Credit spreads have higher probability of profit but lower return-on-risk.
K1 is the lower-strike option and K2 the higher-strike option in all four spread types. The spread width (K2 − K1) caps the maximum payoff. For calls, higher strike means lower premium; for puts, lower strike means lower premium — these differences determine whether you pay or receive a net premium.
The payoff formulas apply at expiry (intrinsic value only) and are valid for both European and American options at expiration. American options carry early assignment risk for in-the-money short legs, particularly near ex-dividend dates — this can alter the actual P&L if the short leg is called or put before expiry. Use these calculations as a guide; actual live positions require real-time option chains.
Also known as
TG we-Calculate Editorial Team. (2026). Options Spread Calculator — Vertical Spread P&L [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/options-spread-calculator
TG we-Calculate Editorial Team. "Options Spread Calculator — Vertical Spread P&L." TG we-Calculate. 2026. https://we-calculate.com/calculator/options-spread-calculator.
TG we-Calculate Editorial Team, "Options Spread Calculator — Vertical Spread P&L," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/options-spread-calculator
@misc{wecalculate_options_spread_calculator, title = {Options Spread Calculator — Vertical Spread P&L}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/options-spread-calculator}}, year = {2026}, note = {TG we-Calculate} }
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