Covered Call Calculator
See exactly what writing a call against your shares pays: premium income, static and if-called returns, both annualized, your new break-even, and the odds of being assigned. Free, with no account or market-data subscription required.Above $106.67 you would have done better simply holding the shares. That is the trade: $167.42 now in exchange for capping your upside.
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This calculator uses a modeled volatility surface. OptionsPro connects your brokerage for live option quotes, P/L, and Greeks on the trades you actually hold.What this covered call calculator does
A covered call is one of the simplest options trades: you own at least 100 shares and sell someone the right to buy them from you at a set price. In exchange you collect a premium up front. This calculator shows exactly what that trade pays under every outcome - the premium income, your static return if the stock sits still, your if-called return if the shares are sold at the strike, both annualized, your new break-even, and how far the stock can fall before the trade loses money.
How to use it
- Enter the share price, what you paid per share, and how many contracts you want to write. One contract covers 100 shares.
- Pick the strike and the days to expiration, and add any dividends you expect before then.
- Leave the premium modeled from implied volatility, or switch to My quote and type the price your broker is showing.
- Compare the if-called return against the assignment odds. Try a couple of strikes: a closer strike pays more and is called away more often.
Static return vs if-called return
Static return is what you make if the stock is unchanged at expiration. With a strike above today's price that means the call expires worthless, you keep the premium and the shares, and you can write another call. If you wrote a strike below today's price, unchanged still finishes in the money, so the static return is the called-away return and the shares are sold. If-called return is what you make when the stock finishes at or above the strike and your shares are sold. If-called is usually the larger of the two, because it includes the gain on the shares up to the strike - unless you wrote a strike below your cost basis, in which case assignment locks in a loss. Both are shown annualized so a two-week trade can be compared with a two-month one.
What a covered call does not do
The premium lowers your break-even, which is real but modest protection. Below that break-even you lose money exactly as a shareholder does, all the way down. Meanwhile the strike caps your gains: if the stock runs well past it, you will wish you had simply held the shares. The calculator names the price where that crossover happens. A covered call trades some of your upside for income you receive today, which is a good trade on a stock you expect to drift, and a poor one on a stock you expect to take off.