Covered Call Calculator

A covered call is long stock plus a short call: you collect premium and cap upside at the strike if shares are called away.

Stock Position

Stock Symbol

Current Stock Price ($)

Your Purchase Price ($)

Number of Contracts (100 shares each)

Call Option

Strike Price ($)

Premium Received per Share ($)

Trade Summary

Enter option details to see payoff diagram

Return if Called

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Return if Unchanged

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Breakeven

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Premium Received

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Commonly asked Covered Call questions

What is a covered call?

You own shares (typically 100 per contract) and sell a call option against them. You collect premium; if the stock finishes above the strike at expiration, shares may be called away at that strike.

How is max profit calculated on a covered call?

Often capped at (strike minus stock cost) times shares plus premium received, if the stock is at or above the strike at expiration. Below the strike, P&L depends on stock price plus premium collected.

What is breakeven for a covered call?

A common reference is purchase price minus premium received per share: the stock can fall by that amount before the position loses money versus entry, ignoring dividends and fees.

When do traders use covered calls?

When they want income on stocks they already own and are willing to sell at the strike, or when they expect limited upside.

What is the main risk?

You keep stock downside below breakeven. Upside is capped at the strike (plus premium context). Assignment can affect taxes and timing.

Do dividends matter?

Yes: ex-dividend dates can affect early assignment risk on short calls. Deep in-the-money short calls are more likely to be assigned before the dividend.