Covered call calculator
Enter your cost basis, strike, premium and days to expiry. The calculator returns net premium, breakeven, static return, return if assigned and the annualised equivalent of each.
How the maths works
Net premium = premium per share × 100 × contracts, less fees. One contract always covers 100 shares, so 3 contracts at $1.80 collects $540 before costs.
Breakeven = cost basis − premium per share. This is the price the stock can fall to before the combined position turns negative.
Static return = premium ÷ cost basis. It assumes expiry below the strike and the shares stay with you, free to be written against again.
Return if assigned = (strike − cost basis + premium per share) ÷ cost basis. If your strike sits below your cost basis this number can be negative even with a fat premium — a common trap when writing calls on an underwater holding.
Annualised = return × (365 ÷ days to expiry). Useful for comparison, but remember a short-dated return rarely repeats 12 times a year without gaps.
Frequently asked questions
- What does a covered call calculator work out?
- It converts a share price, strike price, premium and expiry date into the numbers that actually matter: your net premium received, your effective breakeven, your static return if the stock goes nowhere, your total return if the shares are called away, and the annualised equivalent of that return.
- How is covered call breakeven calculated?
- Breakeven equals your cost basis per share minus the premium received per share. Every extra call you sell against the same shares lowers that breakeven further, which is why tracking premium across rolls matters.
- What is static return versus return if assigned?
- Static return is the premium divided by your cost basis, assuming the stock finishes below the strike and you keep the shares. Return if assigned adds the capital gain (or loss) between your cost basis and the strike price, because the shares are sold at the strike.
- Why annualise a covered call return?
- A 1.5% premium over 30 days is very different from 1.5% over 120 days. Annualising puts every trade on the same scale so you can compare a weekly call against a quarterly one.
Track every covered call automatically
OptionHarvest logs each call you sell, rolls premium into your breakeven, updates prices daily and tells you exactly which positions are at risk of assignment. Free demo — no credit card required.