How accurate is Options Profit Calculator?

N

nwoptions

Hi, I'm interested in buying a bull call spread for NVDA. It's the Oct 15 $222.50/$225. Current price of NVDA is $223.85.

According to Options Profit Cacluator, the max profit is $125 and the max risk is $125. I won't make the full $125 until October 15 (at expiration). Is this accurate? If the price of NVDA goes to $225, I thought I could make the full profit even early on.

Can you please help me?

Thanks
 

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OptionsOptionsOptions said:
  • The short calls have value - you will never get the theoretical maximum profit.
  • You are better off buying the $222.50 calls only.
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For #1, that spread will return max profit at expiration if the price is above 225; the short call's value will be at zero. Never mind that it's generally not a good idea to hold till expiration...

For #2, I'm not sure why you'd say that. Spreads are far more efficient than just buying calls; the cost of the latter moves the break-even significantly higher than the cost of the spread, so it takes that much bigger of a move for it to start paying off.

For the OP: Assuming you buy it for 125 at the open tomorrow, and the price immediately goes to 225, you'll make about... 0.03/share, or $3 total. That's roughly the price change between those two options for a 1-day/$1.10 change in the underlying.
 
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nwoptions said:
Hi, I'm interested in buying a bull call spread for NVDA. It's the Oct 15 $222.50/$225. Current price of NVDA is $223.85.

According to Options Profit Cacluator, the max profit is $125 and the max risk is $125. I won't make the full $125 until October 15 (at expiration). Is this accurate? If the price of NVDA goes to $225, I thought I could make the full profit even early on.

Can you please help me?

Thanks
More...

yes. It’s accurate.

who would buy your callspread for 2.5 at which price they would have NO Chance to profit and only a chance to lose. That’s why you can’t earn the max before expiration.
 
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