Covered Call Calculator
The covered call calculator shows the key metrics for a covered call strategy — where you sell a call option against shares you already own. This popular income strategy generates premium income while giving up potential upside above the strike price. Use this calculator to evaluate different strike prices and optimize your income-to-upside trade-off.
Must be multiple of 100 (1 contract = 100 shares)
Max Profit (if called)
$1300.00
Breakeven Price
$147.00
Premium Income
$300.00
Return if Called
8.67%
Downside Protection
$3.00 per share (2.00%)
How to use this calculator
- 1
Enter your stock purchase price
The price at which you bought (or are buying) the underlying shares.
- 2
Enter the call strike price
The strike price of the call option you are selling. Choose between the current price (ATM), above (OTM), or below (ITM) depending on your goal.
- 3
Enter the premium received
The option premium you receive per share for selling the call.
- 4
Enter the number of shares
Must be a multiple of 100. You can only sell 1 covered call per 100 shares owned.
- 5
Read your outcomes
Max profit if called away, breakeven price, premium income, and the downside protection the premium provides.
Formula
Max Profit = (Strike − Stock Price + Premium) × Shares
Breakeven = Stock Price − Premium
Return if Called = (Strike − Stock Price + Premium) ÷ Stock Price × 100
Downside Protection = Premium received (reduces effective cost basis)The maximum profit is capped at the strike price — if the stock rises above the strike, the shares get "called away" at the strike price, and the seller keeps the premium as additional income. The breakeven is your stock purchase price minus the premium received, since the premium reduces your effective cost. Downside protection is limited to the premium — if the stock falls sharply, losses exceed the premium.
Worked Example
Stock purchase price: $150 Call strike: $160 (out of the money) Premium received: $3/share Shares: 100 (= 1 contract) Premium income = $3 × 100 = $300 Max profit = ($160 − $150 + $3) × 100 = $1,300 Breakeven = $150 − $3 = $147 Return if called = ($160 − $150 + $3) ÷ $150 = 8.67% Downside protection: $3 per share (stock must fall below $147 for a loss)
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