Credit Spread Calculator
A credit spread sells one option and buys a further-out option for protection, collecting a net credit with strictly defined risk. Enter your strikes and credit to grade the trade.
Below short strike = put spread; above = call spread.
Max Profit
$150.00
Max Loss
$350.00
Breakeven
$93.50
Return on Risk
42.9%
Profit / Loss at Expiration
Assumptions & limitations
- Premiums are quoted per share; results use the standard 100-share contract multiplier.
- P&L is at expiration — early assignment, pin risk, commissions, and taxes are not modeled.
Credit spread risk
Max Loss = (Width − Credit) × 100 Max Profit = Credit × 100Width is the distance between strikes. Breakeven sits a credit’s distance beyond the short strike. Return on risk = max profit / max loss.
How It Works
- 1You keep the full credit if the stock stays on the right side of your short strike.
- 2The long option caps your loss at the spread width minus the credit — no margin calls, no unlimited risk.
- 3Higher credits relative to width mean better return on risk but usually lower probability.
Frequently Asked Questions
Put spread or call spread?
Sell put spreads when neutral-to-bullish (profit if stock stays above the short strike); call spreads when neutral-to-bearish.
What’s a good return on risk?
Many traders target credits of about 1/3 the width (a ~50% return on risk), roughly matching a 65–70% win probability.
When should I take profits?
A common rule is closing at 50% of max profit — it improves risk-adjusted returns by dodging late-cycle gamma risk.