A covered call means selling a call option against 100 shares you already own to collect premium income. This free calculator does the math for you: it shows your static yield, your return if the stock gets called away, the annualized version of each, your breakeven price, and how much downside the premium cushions. Type in a trade and every number updates instantly. Educational only, not advice.

How to use the covered call calculator

1. Enter the current stock price and your cost basis (leave the basis equal to the price if you are buying today).
2. Enter the strike price of the call you plan to sell and the premium per share.
3. Set the number of contracts (each covers 100 shares) and the days to expiration.
4. The big number is your annualized return if the shares get called away.

The formula behind it

• Premium income = premium per share x 100 x contracts
• Static return = premium / cost basis
• If-called return = (strike minus cost basis plus premium) / cost basis
• Annualized = period return x 365 / days to expiration
• Breakeven = cost basis minus premium; downside protection = premium / price

Covered call calculator FAQ

What is a good annualized return on a covered call?

Many income traders target roughly 12 to 36 percent annualized, depending on how much upside they cap and how volatile the stock is. Higher premium usually means higher risk.

Static return vs if-called return?

Static is what you earn if the stock finishes flat and you keep the premium. If-called adds the gain on the shares up to the strike when they are called away.

Does this include commissions, taxes, or dividends?

No. It gives a clean before-costs view so you can compare trades on equal footing.

Educational only, not financial advice.