Covered Call Calculator
Calculate potential returns and breakeven points for covered call options strategies
About this calculator
A covered call calculator helps investors analyze potential profits and risks when selling call options against stocks they own. This income-generating strategy allows you to collect premium income while potentially selling your shares at a higher price. The calculator determines your maximum profit, breakeven point, and various scenarios based on stock price movements, helping you make informed decisions about strike prices and expiration dates for optimal returns.
How to use
Enter your stock purchase price, current stock price, call option strike price, and premium received. Input the number of shares and contracts involved. The calculator will instantly show your potential profit scenarios, breakeven point, and maximum returns if the option expires or gets exercised.
Frequently asked questions
What is a covered call strategy?
A covered call involves owning 100 shares of stock and selling a call option against those shares to generate premium income.
When should I use covered calls?
Use covered calls when you're neutral to slightly bullish on a stock and want to generate additional income from your holdings.
What happens if my stock price exceeds the strike price?
Your shares will likely be called away, but you keep the premium and profit from stock appreciation up to the strike price.