Covered Call Calculator
Calculate covered call P&L, maximum profit, breakeven price, and annualized return. Analyze if-assigned vs if-not-assigned scenarios, roll-over decisions, and tax treatment.
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Max Profit (if assigned)
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Breakeven Price —
Current P&L (per share) —
Approx. Assignment Probability —
Extended More scenarios, charts & detailed breakdown ▾
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Total Profit if Assigned
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Return if Assigned —
Annualized Return —
Breakeven Price —
Professional Full parameters & maximum detail ▾
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P&L Summary
Max Profit (if assigned) —
Breakeven Price —
Return Scenarios
Return if Assigned —
Annualized Return —
Return if Stock Flat (keep premium) —
Return if Stock −10% —
Income & Tax
Combined Annualized Yield (+ Dividend) —
Tax Treatment Note —
How to Use This Calculator
- Enter your Stock Purchase Price (cost basis).
- Enter the Call Strike Price sold and Premium Received.
- Enter the Current Stock Price to see real-time P&L.
- Use the tabs to model If Assigned, If Not Assigned, or Roll Over scenarios.
- Switch to Professional for annualized returns, tax treatment, and dividend yield integration.
Formula
Max Profit = Strike − Cost Basis + Premium
Breakeven = Cost Basis − Premium
Return if Assigned = Max Profit / Cost Basis × 100%
Annualized Return = Return × (365 / Days to Expiry)
Example
Example: Buy stock at $95, sell $100 call for $3 premium, 30 days to expiry. Max profit = $100−$95+$3 = $8/share. Breakeven = $92. Return if assigned = 8.4%. Annualized = 102%.
Frequently Asked Questions
- A covered call is when you own 100 shares of a stock and sell a call option against those shares. You collect premium upfront. If the stock stays below the strike at expiry, you keep the premium and the stock. If the stock rises above the strike, your shares are "called away" at the strike price.
- Maximum profit = (Strike Price − Stock Cost Basis) + Premium Received. This is capped — if the stock rises far above the strike, you miss out on those gains because you are obligated to sell at the strike.
- Breakeven = Stock Cost Basis − Premium Received. The premium provides downside protection equal to the premium amount. Below breakeven, you start losing money on the position.
- Consider rolling when: (1) the call is deep ITM and you want to keep the stock, (2) you can roll to a higher strike for a net credit, or (3) there are few days left and you want to capture a new premium cycle. Rolling to a next-month strike at a net credit is generally favorable.
- Dividends add to the total income yield when combined with call premiums, enhancing annualized returns. However, be aware that ex-dividend dates can increase assignment risk as the call buyer may exercise early to capture the dividend.
Related Calculators
Sources & References (5) ▾
- CBOE Strategy Guide — Covered Calls — Chicago Board Options Exchange
- Covered Call Writing — Tastytrade — Tastytrade
- Covered Call Strategy Explained — Investopedia
- Options Industry Council — Covered Calls — Options Industry Council
- Schaeffer's Investment Research — Covered Calls — Schaeffer's Investment Research