How do I calculate option payoff before its expiration date? For example, if I long a 6 month call with K = 11100, T = 0.5, p = 150, what would be the payoff of the option if I exercise it in 3 months time and if the spot price is 11300.?


closed as off-topic by KeSchn, skoestlmeier, phdstudent, byouness, amdopt Aug 12 at 13:30

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – KeSchn, skoestlmeier, phdstudent, byouness, amdopt
If this question can be reworded to fit the rules in the help center, please edit the question.

  • 2
    $\begingroup$ @smurfacco Why not upgrade that to an answer $\endgroup$ – dm63 Aug 12 at 10:09
  • $\begingroup$ @dm63 answer done. $\endgroup$ – SmurfAcco Aug 12 at 12:16

If you exercise the option (assuming that is an american option) you would receive the intrinsic value, which is for a Call option $\max(S-K, 0) $, and for a Put option $\max(K-S, 0)$. Hence, 11300.00 - 11100.00 = 200.
If you are talking about selling the option instead of exercising it, I recommend to have a look at the Black & Scholes model, John C Hull "Options, Futures and other Derivatives" is a good reference here.


Not the answer you're looking for? Browse other questions tagged or ask your own question.