Covered Call Calculator

Per share — the number your broker quotes. A premium shown as 3.20 means $3.20 a share, which is $320 for one contract. Entering 320 here would overstate the trade a hundredfold, so the field is labelled per share and the results panel always shows the total separately.

On your broker's option chain for the ticker and expiry you are looking at. The strike is the row; the premium is the bid, the ask, or the mid depending on which side of the trade you expect to get filled. Buyers are usually closer to the ask, sellers closer to the bid.

Use the price you realistically expect to trade at. The mid is a fair planning assumption on a liquid contract with a tight spread. On a wide spread the mid can be optimistic by more than the edge you are hoping for, so run the calculation twice — once at the mid, once at the worse side — and see whether the trade still makes sense.

It does not change the payoff at expiration — that depends only on where the stock finishes. It is used for the percentage move required to reach breakeven, and for the leverage comparison. Both are context for deciding whether the trade is plausible, not part of the P/L arithmetic.

Enter the total contracts and the weighted average premium you actually paid or received. If the fills were far apart, running each block separately and adding the results is more honest, because a single average hides how different the two breakevens are.

Yes. Copy link puts every input into the URL, so the link you paste opens with the answer already on screen — useful for a second opinion or for your own notes. Download CSV gives you the summary plus the whole payoff curve, which opens straight into a spreadsheet.

Because that is what your breakeven depends on. A $55 call for $1.50 on shares bought at $50 breaks even at $48.50; the same call on shares bought at $62 breaks even at $60.50. Calculators that assume you bought at today's price get this wrong for anyone writing calls on a position they already hold, which is most people writing covered calls.

No. A poor man's covered call replaces the 100 shares with a long-dated deep in-the-money call, which makes it a diagonal spread with two expiries and a different risk profile. Pricing it as a covered call would understate the risk. It is on the list of pages to build.

Your share cost basis minus the premium received. The premium lowers your effective entry price, which is the whole downside benefit of the strategy — and it is a small one. A $1.50 premium on a $50 stock buys you a 3% cushion.

Static is what you make if the call expires worthless and you keep the shares — just the premium against your capital. If-called is what you make if the stock finishes above the strike and the shares are sold: the premium plus the gain from your basis up to the strike. They are different outcomes, so the page reports them separately rather than picking the flattering one.

It is arithmetic, not a forecast. It answers "what rate is this, expressed per year" so a 45-day trade can be compared with a 30-day one. It assumes you could repeat the same trade at the same premium all year, which you cannot rely on — premiums fall when volatility falls, and a called-away position has to be re-entered at a new price. Treat it as a comparison tool.

Everything the shares can lose, less the premium you kept. If the stock goes to zero you lose your basis minus the premium — $4,850 per contract in the default example. The premium makes the loss slightly smaller; it does not make the position safe.

Then the position cannot break even, and the calculator says so rather than showing a price. Selling a $55 call on shares that cost you $62 locks in a loss: the most you can get for the shares is $55, and $1.50 of premium does not close a $7 gap. It is sometimes a deliberate choice — taking a known small loss to exit a position while collecting something — but it should be a choice rather than a surprise.

Nearer the money pays more premium and gets called away more often; further out pays less and leaves more room to run. The trade-off is visible on this page — change the strike and watch the static return fall while the if-called return rises. There is no correct answer, only which outcome you would rather have.

Not here, and deliberately so. P/L before expiry depends on implied volatility, interest rates and the time remaining, and any tool that shows it is running a model whose inputs you would have to supply and trust. This page answers the narrower question exactly rather than the broader one approximately.

Usually nothing immediately. Short calls can be assigned early because US equity options are American-style, but it is uncommon while the option still has meaningful time value — the holder would be throwing that value away. The real early-assignment risk is the day before an ex-dividend date, when a call holder may exercise to capture the dividend.

Your 100 shares per contract are sold at the strike, the cash arrives, and you keep the premium. The position is closed. It is the good outcome for a covered call — the if-called return on this page is what you made — even though it feels like a loss when the stock keeps climbing afterwards.

You can buy back the call and sell a later one, which is what rolling means. Whether it helps depends on the debit you pay to close the near call — if the stock has run well above the strike, buying it back can cost more than the new premium brings in. This calculator prices a single call; run it twice, once for each leg, to see the whole picture.

Because at expiration there is no time value left — an option is worth exactly its intrinsic value, and intrinsic value needs only the strike and the finishing stock price. Volatility matters for what an option is worth before expiry, which is a pricing question rather than a profit question.

Only if you enter them. Put the total for the round trip in the commissions field and they come off the profit and move the breakeven — a $13 commission on one contract shifts the breakeven by 13 cents, which is small but not nothing on a tight trade.

No. Options tax treatment depends on your country, your holding period, whether the position was assigned or closed, and in some cases whether it was part of a straddle. Treat every figure here as pre-tax and check your own situation.

Ignored. A dividend reduces the stock price on the ex-date, which affects where the stock finishes, and for anyone short a call it raises the chance of early assignment the day before the ex-date. Neither effect is modelled.

The calculator assumes the standard US equity multiplier of 100 shares per contract. After a split, a spin-off or a merger a contract can be adjusted to a non-standard deliverable, and index options use other multipliers. In those cases the per-contract figures here will be wrong.

No. The whole calculation runs in your browser; nothing is sent to a server, there is no account, and the page works the same with the network switched off after it loads.

Yes, as long as you still hold the shares on the ex-dividend date and have not been assigned before it. That is the catch: an in-the-money call is most likely to be exercised early on the day before the ex-date, precisely so the holder gets the dividend instead of you. The calculator does not model dividends at all.