Covered Call Calculator
Estimate premium income, the return if the shares are called away, the break-even price and the payoff across share prices.
Quick answer
A covered call is owning shares and selling a call against them for premium. Static return = premium / share price; return if called = (strike - share price + premium) / share price. Break-even is price minus premium.
Covered Call Calculator
Options normally cover 100 shares per contract.
Static Return (Not Called)
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Return If Called
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Downside Protection
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Break-even Share Price
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Premium Income
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Max Profit vs Your Cost
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Educational only, not trading or investment advice. Estimates before fees and tax.
Outcome by Price at Expiry (measured from today's price)
| Price at expiry | Shares only | Covered call | Result |
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Assumptions & method
- Static return = premium ÷ current share price. Return if called = (strike − share price + premium) ÷ share price.
- Annualised = (1 + period return)^(365 ÷ days) − 1, assuming the same trade can be repeated. It is an illustration, not a forecast.
- Downside protection % = premium ÷ share price. Break-even = share price − premium (and cost basis − premium measured against your cost).
- Max profit versus your cost = (strike − cost basis + premium) × shares, when the shares are called away at the strike.
- The table and chart compare P/L from today's price at expiry: covered call = (min(price, strike) − current price + premium) × shares.
- Not included: commissions, taxes, dividends, early assignment and margin.
- Educational only; this is not trading or investment advice.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How a covered call works
A covered call pairs shares you own with a short call on those shares. The premium is yours to keep whatever happens, which lifts your return if the price stays flat or drifts slightly and cushions a small fall. In exchange you give up gains above the strike, because the buyer can take your shares at that price. The outcome therefore sits between two numbers: the static return if the option expires unused, and the if-called return if the shares are sold at the strike. This calculator shows both, annualises them for comparison and charts the payoff against holding the shares alone.