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Covered call calculator
A free calculator for covered calls. Enter a cost basis, call strike, premium, days to expiration and number of contracts — it returns the premium collected, static return if unchanged, return if called away, annualized yield, breakeven and max gain if called. Every figure is arithmetic on the numbers you type.
What these figures are. Every output is plain arithmetic on the numbers you entered — no live market data, no ranking, no recommendation. The two returns are arithmetic scenarios you selected by typing a strike — "if unchanged at expiration" and "if called away at the strike" — not a forecast, and not a claim that either will occur. The calculator does not estimate a probability of assignment or tell you which strike to sell. Runs entirely in your browser — your inputs never leave your device. It is descriptive, not investment advice.
$50 cost basis, $55 call strike, $1.50 premium, 30 days, 1 contract gives: premium collected $150.00, return if unchanged 3.00%, return if called away 13.00%, annualized (if unchanged) 36.50%, breakeven $48.50, max gain if called $650.00. These are hypothetical round numbers, not any live figure. The values loaded above match those numbers.
How each figure is calculated
These are the standard covered-call math. Each is reproducible from the five inputs above — nothing is estimated or forecast. A covered call is the other leg of the wheel from a cash-secured put; if you write puts instead, use the cash-secured put calculator. For how the two strategies compare, see cash-secured put vs covered call. PutFinder's screener covers cash-secured puts; this tool covers the other wheel leg. For how PutFinder combines factors into a single relative rank, see the scoring methodology; for the screening process end to end, see how a CSP screener works. See all free tools on the tools hub.
- Premium collected = premium × 100 × contracts
- The cash received for selling the call, in dollars. The per-share premium times 100 shares per contract times the number of contracts.
- Return if unchanged (static) = premium ÷ basis
- The premium as a fraction of your cost basis, if the stock is unchanged at expiration and the call expires. A unitless ratio — the per-share amounts cancel, so there is no ×100 contract multiplier here. An arithmetic scenario on the premium, not a return prediction.
- Return if called away = (strike − basis + premium) ÷ basis
- If the shares are called away at the strike: the capital gain to the strike plus the premium, as a fraction of your basis. Also a unitless ratio — no ×100. It is the arithmetic of that scenario, not a claim it will occur and not a probability of assignment.
- Annualized (if unchanged) = (premium ÷ basis) × (365 ÷ DTE)
- The static return scaled to a one-year rate by the days to expiration. Also a unitless ratio — no contract ×100. It describes the current premium on a per-year footing so calls of different lengths compare on the same basis; it is not an expected, projected, or compounded return.
- Breakeven = basis − premium
- The per-share price at which the position turns from a paper gain to a paper loss at expiration — your cost basis reduced by the premium already received.
- Max gain if called = (strike − basis + premium) × 100 × contracts
- The dollar gain if the shares are called away at the strike — the gain is capped there because upside above the strike is forgone. The per-share figure times 100 shares per contract times contracts.
References
- The Options Industry Council (OIC) — options basics, assignment, and the covered call: optionseducation.org.
- Cboe S&P 500 BuyWrite Index (BXM) — a benchmark for systematically writing covered calls: cboe.com/us/indices/dashboard/BXM.
- Cboe Options Institute — education on options mechanics and terminology: cboe.com/optionsinstitute.
Common questions
How do you calculate the return on a covered call?
There are two arithmetic scenarios. The static (if-unchanged) return is the premium per share divided by the cost basis. The if-called return is (strike − basis + premium) ÷ basis. For a $50 basis and a $55 call sold for $1.50, the static return is 3.00% and the if-called return is 13.00%. Both are arithmetic descriptions of the entered premium and strike — not an expected or guaranteed return, and not a claim that either scenario will occur.
What is the breakeven on a covered call?
The breakeven is the cost basis minus the premium per share. With a $50 basis and a $1.50 premium the breakeven is $48.50 — the price at which the position turns from a paper gain to a paper loss at expiration. It describes the entry math, not a forecast of where the stock goes.
What is the maximum gain on a covered call?
If the shares are called away at the strike, the gain is capped at (strike − basis + premium) × 100 × contracts, because upside above the strike is forgone. For a $50 basis, $55 strike and $1.50 premium, one contract caps the gain at $650. It is the arithmetic ceiling of the scenario you selected by typing a strike, not a probability that it happens.
Is this covered call calculator investment advice?
No. It runs pure arithmetic on the numbers you type — no live data, no ranking, no recommendation — entirely in your browser, so your inputs never leave your device. Annualized yield is arithmetic on the premium you entered, not a return prediction, and it does not estimate a probability of assignment or tell you which strike to sell. It is a descriptive tool, not investment advice.
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