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Payoff at expiry for the sale of a call option formula

Tags:  options valuation and pricing

Description of the Payoff at expiry for the sale of a call option formula

Formula for calculating the payoff of a short position in a call option.

Formula

Rsc=P−min((ST−K),0) 

Symbols

K        
Option strike price
P        
Value of the option premium
ST        
Price of the underlying at expiry date T of the option

Additional information related to this formula

Related definitions from the glossary of financial terms

Call option  •  Option  •  Put option  •  Risk-free interest rate

Related calculators

Option strategy calculator   •   Pricing of an option (Black & Scholes)