Covered Call Calculator
A covered call is selling a call option against stock you own to collect premium. This calculator shows the premium yield on your cost, that yield annualized, your total return if the shares are called away at the strike, the new breakeven price and the maximum profit. The tradeoff is capped upside above the strike.
For education only, not financial advice. Read the disclaimer.
HOW IT WORKS
premium yield = premium / cost and annualized = yield x 365 / days (simple, not compounded). If the shares are called away at expiry, return = (premium + strike - cost) / cost.
breakeven = cost - premium and max profit = (strike - cost + premium) x 100 per contract. Below the breakeven you lose money like any stock holder; above the strike your gain is capped. Dividends and early assignment are not included.