50% profit target calculator for sold options
You sold an option. Now where do you place the order to take half and walk away? Enter your premium and see the exact buy-back price, what you keep, and what the stop costs if the trade turns on you.
| If you buy it back at | Per share | Result |
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How it works: you sold an option and took in the premium. To lock in a share of it, you place a buy-to-close order at a lower price. Buy-back price = premium × (1 − target %). It is rounded down to the cent, so you keep at least your target. What you keep = (premium − buy-back price) × 100 × contracts. The stop works the other way: buy-back price = premium × your multiple, and the loss = (stop price − premium) × 100 × contracts. Fees are left out.
Why so many sellers close at 50%
A sold option loses value as time passes. Often the first half of the premium comes in faster than the second half. The last half takes more days and leaves the trade open to a big move the whole time. Closing at 50% takes the easy half and frees the cash for the next trade. Many sellers set the order the same day they sell, as a "good till canceled" (GTC) order, so it fills on its own while they're at work. More in close at 50% or hold to expiry and the pillar, the wheel strategy explained.
Look at the stop row before you sell
The target is the happy row. The stop row is the one that decides if the plan adds up. At a 2× stop, one loss wipes out about two wins at 50%. So you need to win about two trades in three just to come out even. Put both numbers in your journal before you place the trade. My free trading templates have a column for each.
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