Covered call calculator
A covered call means owning shares and selling a call option on them for a premium. Enter what you paid per share, the strike and the premium of the call, the number of shares and a price at expiration. The calculator shows your profit or loss at that price, the most you can make, the break-even price and the returns.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the share cost (what you paid per share) and the number of shares covered (100 per contract on most exchanges).
- Enter the strike and the premium of the call you sell.
- Enter a stock price at expiration to see the result in that scenario.
Per share, at expiration price P:
- Profit = min(P, strike) − share cost + premium
- Maximum profit = strike − share cost + premium (when P ≥ strike)
- Break-even = share cost − premium
- Premium yield = premium ÷ share cost
- Return if called = (strike − share cost + premium) ÷ share cost
Worked example
100 shares bought at 50, a 55 call sold for 2:
- Premium received 200.00, premium yield 4 %.
- Break-even 48, maximum profit 700.00, return if called 14 %.
- At 53 the call expires and you keep the shares: (53 − 50 + 2) × 100 = 500.00, a 10 % return.
- At 60 the shares are called at 55: profit stays at 700.00.
- At 40: (40 − 50 + 2) × 100 = −800.00.
Tips
- A strike closer to the price pays more premium but caps the gain sooner.
- If you would not be happy selling at the strike, do not sell that call.
- Dividends and commissions are not included; an ex-dividend date before expiration can make early assignment more likely.
Frequently asked questions
What is the maximum profit of a covered call?
(Strike − share cost + premium) × shares. Above the strike the shares are called away at the strike, so any further rise goes to the buyer of the call. With shares at 50, a 55 strike and a 2 premium, that is 7 per share.
What is the break-even price?
Share cost − premium. The premium cushions a fall: shares bought at 50 with a 2 premium break even at 48.
What is the risk of a covered call?
You keep the downside of owning the shares, softened only by the premium, while the upside is capped at the strike. In a sharp fall the loss is almost the same as holding the shares.
How do I compare covered calls?
Premium yield (premium ÷ share cost) shows what you earn if the shares stay where they are; return if called shows the best case. Divide by the days to expiration to compare options of different lengths.