Option Payoff Diagrams
Premium
Call Option Payoff
A call option is the right, but not the obligation, to buy an asset at a prespecified price on, or before, a prespecified date in the future.
This diagram shows the option's payoff as the underlying price changes. Above the strike price of $100, the payoff of the option is $1 for every $1 appreciation of the underlying. If the stock falls below the strike price at expiration, the option expires worthless. Therefore, a call option has unlimited upside potential, but limited downside.
Unlock Premium Content
Upgrade your account to access the full article, downloads, and exercises.
You'll get access to:
- Access complete tutorials and examples
- Download source code and resources
- Follow along with practical exercises
- Get in-depth explanations