What is a Covered Call Strategy?
A covered call is an options strategy where an investor holds a long position in a stock and simultaneously sells (writes) call options on that same stock to generate premium income. This buy-write strategy is one of the most popular options strategies used by investors who have a neutral to moderately bullish outlook on the underlying stock.
By selling the call option, you collect a premium that provides immediate income and lowers your effective cost basis. However, in exchange for this premium, you cap your potential upside if the stock price rallies significantly above the strike price at expiration.
How to Use This Covered Call Calculator
- 1
Enter a Stock Ticker
Type the ticker symbol (e.g., AAPL, MSFT, TSLA) and click "Analyze Covered Calls" to fetch real-time OTM call options.
- 2
Set Your Purchase Price
Input the price at which you bought (or plan to buy) the stock. The current market price is auto-filled when available.
- 3
Specify Number of Shares
Enter how many shares you own. Each options contract covers 100 shares, so use multiples of 100 for best results.
- 4
Select an Expiration Date
Choose from available expiration dates to compare covered call opportunities across different time horizons.
- 5
Compare and Analyze
Review the sortable results table showing premium income, max profit, breakeven, ROI, and annualized return for each strike price. Click the chart icon to visualize the payoff diagram.
Key Metrics Explained
Premium Income
The total cash received from selling the call option. Calculated as Option Premium × Number of Shares.
Maximum Profit
(Strike Price - Purchase Price) × Shares + Premium Income. Achieved when stock is at or above the strike at expiration.
Breakeven Point
Purchase Price - Premium Per Share. The stock price at which you neither profit nor lose on the combined position.
Annualized ROI
The return on investment scaled to a full year based on days to expiration. Useful for comparing options with different expirations.
Why Use Our Covered Call Calculator?
Real-Time Data
Fetches live options chain data so you always see current premiums, IV, and Greeks.
Compare All Strikes
Instantly compare every available OTM strike price in a sortable table instead of manual calculations.
Visual Payoff Diagram
Interactive chart showing covered call P/L vs. stock-only P/L at every price point at expiration.