Covered Call Calculator
Stock and call assumptions
Covered-call summary
This models 100 shares covered exactly by the entered contracts. The simple annualized premium yield is a mechanical one-period annualization, not an expected return and not an assumption that you can repeatedly sell calls at the same economics.
Expiration payoff scenarios
The table measures both the stock alone and the covered-call position from today's entered stock mark. Above the strike, the short call's intrinsic obligation offsets additional stock appreciation. Premium is included in covered-call P&L.
| Stock at expiration | Stock-only P&L | Short-call obligation | Covered-call P&L | Covered-call return | Covered call vs. stock |
|---|---|---|---|---|---|
| $0.00 | -$10,000 | $0 | -$9,700 | -97% | $300 |
| $97.00 | -$300 | $0 | $0 | 0% | $300 |
| $100.00 | $0 | $0 | $300 | 3% | $300 |
| $110.00 | $1,000 | $0 | $1,300 | 13% | $300 |
| $132.00 | $3,200 | $2,200 | $1,300 | 13% | -$1,900 |
Premium cushions downside, but it also sells away upside
At expiration, the premium lowers the stock price needed to break even by the premium received per share. If the stock finishes above the strike, however, the short call offsets any additional stock appreciation above that strike. That is why the position's maximum expiration P&L is capped.
Expiration breakeven = current stock price − premium per share
Maximum expiration P&L = (strike − current stock price + premium per share) × covered shares
Maximum loss at a zero stock price = (current stock price − premium per share) × covered shares
A strike below the current stock price can still be entered. If the strike plus premium is below today's stock mark, the calculator will show a negative maximum expiration P&L rather than assuming the trade is favorable.
Where this calculator stops
This is expiration payoff math, not an option-pricing or probability model. It does not estimate implied volatility, delta, Greeks, probability of profit, probability of assignment, expected return, or a recommended strike or expiration. It also does not fetch an option chain or live stock price.
Listed U.S. equity options are generally American-style, so assignment can happen before expiration. This calculator does not model early assignment, dividends or ex-dividend incentives, option time value before expiration, bid-ask spreads, commissions, taxes, rolling, or closing the call early.
Use the Protective Put Calculator when you are buying downside protection rather than selling upside, or the Stock Position Sizing Calculator when the question is how many shares to own rather than how a covered call changes their payoff.
Method and contract-size sources
- Options Industry Council: Covered Call (Buy/Write), including standard maximum-gain, maximum-loss, breakeven, and assignment mechanics.
- Options Clearing Corporation: Equity Options Product Specifications, including the standard 100-share contract unit, adjusted contracts, and American-style exercise.