Options Premium Calculator
Put and call premium for grain marketing strategies.
Inputs
Results
Total premium ($)
$2,500.00
≈ 19 pairs of sneakers
Floor price ($/bu)5.55
Intrinsic value ($/bu)0
Time value ($/bu)0.25
Bushels protected10,000
Cost Per Bu$0.25
How to Use This Calculator
- Enter the Futures Price and Strike Price for the put or call option.
- Enter Premium Per Bushel, Contract Size in bushels, and Number of Contracts.
- Review Total Premium Cost — this is the maximum risk when buying options.
- Check Floor Price Per Bushel (strike minus premium) as your effective price floor.
- Use Intrinsic Value and Time Value breakdown to evaluate whether an option is in-the-money.
How the result changes with Premium ($/bu)
| Premium ($/bu) | Total premium ($) |
|---|---|
| 0.5 | $5,000.00 |
| 1.75 | $17,500.00 |
| 3.25 | $32,500.00 |
| 4.5 | $45,000.00 |
What each input means
- Futures price ($/bu)
- Current futures contract price.
- Strike price ($/bu)
- Option strike price.
- Premium ($/bu)
- Option premium per bushel.
- Contract size (bu)
- Bushels per options contract.
- Number of contracts
- Number of option contracts to buy.
What each result means
- Total premium ($)
- Total cost of the options position.
- Floor price ($/bu)
- Effective minimum price (strike minus premium).
- Intrinsic value ($/bu)
- In-the-money value of the option.
- Time value ($/bu)
- Premium minus intrinsic value.
- Bushels protected
- Total bushels covered by the options.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersFutures price ($/bu) = 6, Strike price ($/bu) = 5.8, Premium ($/bu) = 0.25, Contract size (bu) = 5000 = 5 input(s) provided
- Calculate Total premiumTotal premium = premiumPerBu * contractSizeBu * numContracts2500 = $2,500
- Calculate Floor priceFloor price = round((strikePrice - premiumPerBu) * 10000) / 100005.55 = 5.55
- Calculate Intrinsic valueIntrinsic value0 = 0
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